Buy Axis Bank; target of Rs 1425: Asit C Mehta

Buy

Asit C Mehta report on Axis Bank

Axis Bank reported Q4FY25 results slightly below our estimates in terms of advances growth (marginal miss by 0.5%), mainly due to slow growth in the retail advances. However, deposits reported an improvement with a growth of 7% QoQ (1.2% above our estimates). The bank reported an improvement in its CD ratio by 385bps QoQ/157bps YoY (150bps over our estimates). Credit quality improved during the quarter with 18bps QoQ/15bps YoY improvement in the GNPA. Margin during the quarter reported a marginal improvement 2bps QoQ/YoY, mainly due to a slight moderation in the cost of funds growth.

Outlook

We remain positive on Axis Bank given the expectation of healthy credit growth, pickup in deposit mobilisation and stable margins. We expect the bank’s advances/deposits to grow at a CAGR of 13%/14% along the NIMs moderating at 3.8% in FY27E (from 3.8% in FY25) leading to NII/PPOP/PAT CAGR growth of 14%16%12% over FY25-27E. We thus maintain Buy on Axis Bank with a revised target price of Rs 1,425, valuing the standalone bank at 1.5x of its FY27E Adj. BVPS.

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AXSB - 25042025 - asit