Buy Axis Bank; target of Rs 1350: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Axis Bank

AXSB saw a weak quarter as loan growth, fees and asset quality were a miss. However, core PPoP beat PLe by 2.2% as opex was 7.5% lower to PLe following softer balance sheet accretion. Slippages/provisions remained elevated due to continued unsecured stress and seasonality in agri. Loan growth was weaker at 8.8% YoY led by slowdown in retail. Bank commentary suggests that loan offtake would remain challenged due to constrained deposit addition. We trim loan/deposit growth for FY25/26/27E by avg. 2.6%/3.4% which would be partly offset by cut in opex by avg. 5.6%. Hence our core PAT for FY26/27E is lower by 3.2%/6.3%.

Outlook

While target multiples could be lowered across the banking sector due to a tough macro environment, quantum cut would be higher for AXSB due to weaker loan growth/asset quality. We trim multiple from 2.2x to 1.9x on Sep’26 ABV and lower TP to Rs1,350 from Rs1,530. Retain ‘BUY’.

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Axis Bank - 17012025 - prabhu