Axis Bank share price gains 2% after Jefferies maintains 'buy'
Jefferies is of the view that the overall trend has improved with a better than expected festival season.
November 24, 2020 / 10:41 AM IST
Axis Bank share price gained 2 percent intraday on November 24 after Jefferies retained "buy" call on the stock and has raised the target to Rs 700 from Rs 610 per share.
The research firm is of the view that the overall trend has improved with a better than expected festival season, CNBC-TV18 reported.
It feels that RBI's actions with Lakshmi Vilas Bank and DBS Bank and new banks can raise competition. Jefferies sees earnings recovery in FY22 onwards.
The stock was trading at Rs 607.50, up Rs 11.90, or 2 percent, at 1024 hours. It has touched an intraday high of Rs 609 and an intraday low of Rs 601.
The private sector lender reported a net profit of Rs 1,683 crore for Q2 FY21 as against a net loss of Rs 112 crore in Q2 FY20. The bank’s operating profit for the quarter grew 16 percent year-on-year (YoY) and 18 percent quarter-on-quarter (QoQ) to Rs 6,898 crore.
The bank said its net interest income (NII) grew 20 percent YoY to Rs 7,326 crore in Q2 FY21 from Rs 6,102 crore in Q2 FY20. The net interest margin (NIM) for Q2 FY21 was 3.58 percent as against 3.51 percent for Q2 FY20.
Emkay Global Financial Services likes Axis Bank's aggressive stance to front-load provisions. "It may depress RoA/RoE at 0.7 percent/7 percent in FY21 but should improve to 1.4 percent/13 percent by FY23, aided by better growth, cost ratios and contained provisions," the research firm said.
"We upgrade Axis Bank to buy and revise the target to Rs 620 (from Rs 520), valuing core bank at 1.5x Dec’22 ABV and subs at Rs 23," it added.Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.