Buy Axis Bank; target of Rs 1250: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Axis Bank has recommended buy rating on the stock with a target price of Rs 1250 in its research report dated October 31, 2023.

Subhash Helgaokar

November 06, 2023 / 10:17 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Axis Bank

AXSB delivered good numbers as core PPoP beat PLe by 8.2% led by better NII and fees; opex was a drag. As net slippages were controlled, provisions were lower leading to better profitability. NIM positively surprised yet again at 4.19% (beat by 24bps) driven by (1) strong QoQ growth in higher margin segments of PL, SME and SBB (2) intentional slowdown in housing and (3) lower deposit growth of 1.6% QoQ resulting in higher LDR. Bank expects NIM to remain at healthy levels due to change in product mix towards retail/SME. RTD growing by 4.4% QoQ was another positive. Balance sheet construct is being calibrated towards higher margin segments and granular deposits.

Outlook

However, deposit growth needs to catch-up for sustained loan growth of 17%+. CITI integration and business investments would keep opex elevated. With likely RoA of 1.7% for FY25/26E, we maintain multiple at 2.2x but raise TP to Rs1,250 from Rs1,170 as we roll forward to Sep’25E ABV. Retain ‘BUY’.

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