Buy Axis Bank; target of Rs 1500: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Axis Bank

AXSB saw a decent quarter due to better deposit growth at 7.0% QoQ (PLe 3.0%) and higher fees (8.7% beat). Adjusted for (1) PSLC income of Rs1.7bn (2) PSLC cost of Rs5.9bn and (3) provision write-back of Rs8.0bn in SR, core PAT beat PLe by 5.0% to Rs65.8bn. Since higher LDR was a constraint to healthy loan growth, balance sheet has been repaired as LDR declined QoQ to 88.7% from 92.6% in Q3FY25. While asset quality was better owing to lower net slippages, provisions adjusted SR write-back, remained elevated at 86bps (PLe 81bps) led by higher write-offs. CC has stabilized whereas PL would take a few more quarters to normalize; MFI share is not material at ~1% of retail loans.

Outlook

Owing to improved LDR, we tweak multiple to 2.0x from 1.9x and increase TP to Rs1,500 from Rs1,350 as we roll forward to Mar’27 ABV. Retain ‘BUY’.

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Axis Bank - 25042025 - prabhu