Buy Axis Bank; target of Rs 1283: KR Choksey

BUY

KR Choksey's research report on Axis Bank

AXSB’s Net Interest Income (NII) grew 8.6% YoY to INR 136,059 Mn in Q3FY25. The Bank’s PPOP (Pre-Provisioning Operating Profit) for the quarter was INR 105,339 Mn, a growth of 15.2% YoY (-1.7% QoQ) led by operating efficiencies. Net profit grew 3.8% YoY to INR 63,038 Mn in Q3FY25. The modest growth was primarily due to higher provisions of INR 21,556 Mn during the quarter. The operating performance met our expectations; however, higher provisions resulted in earnings miss compared to our estimates. Higher slippages for Q3FY25 were primarily driven by the retail segment, with stress evident in unsecured loans like personal loans and credit cards. AXSB is actively mitigating slippage risk through enhanced portfolio monitoring, early warning triggers, and recalibrating risk policies. We have cut our book value estimates for FY26E/ FY27E by 2.3%/ 4.0%, considering the risk of higher provisions and modest business growth.

Outlook

We revise our target price downwards to INR 1,283 per share (earlier INR 1,345 per share), applying a 1.7x P/ABV multiple to its FY27E adj. book value. However, we reiterate our rating as “BUY” on AXSB shares.

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Axis Bank - 20012025 -kr