After Axis Bank posted strong results, here's what brokerages have to say

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26 Aug, 2025 12:21

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Axis Bank share price added two percent in early trade a day after the company announced its December quarter earnings.

The bank reported a 224 percent year-on-year rise in its net profit at Rs 3,614 crore.

The private sector lender also reported a 17 percent growth in net interest income to Rs 8,653 crore.

The bank posted a strong performance on the asset quality front as gross non-performing asset ratio slipped 36 basis points sequentially to 3.17 percent. Net NPA ratio fell 17 basis points on-quarter to 0.91 percent.

Axis Bank said its net loan slippage ratio declined 38 basis points on-quarter to 0.06 percent. Specific loan-loss provisions declined to Rs, 790 crore from Rs 927 crore in the previous quarter.

Fee income grew 15 percent on year to Rs  3,344 crore whereas trading profits and miscellaneous income stood at Rs 367 crore and Rs 130 crore, respectively.

Total deposits grew 20 percent on year to Rs 7.7 lakh crore with current account-savings account deposits rising 22 percent. The CASA ratio improved 189 basis points on year to 44 percent.

Overall capital adequacy ratio (CAR) including profit for the first nine months of the current financial year stood at 18.72 percent with common equity Tier I ratio of 15.33 percent.

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Here is what brokerages have to say about the stock and the company after December quarter earnings:

Goldman Sachs

The foreign research firm has kept a buy call on the stock with a target at Rs 927.

"There was a miss on core operating profit, slightly offset by lower provisions. However, the lender is well positioned to benefit from the ongoing industry consolidation," Sachs said.

CLSA

CLSA has kept a buy rating on the stock with a target at Rs 1,080 per share as the results were strong across the board with 6.9% on-quarter loan growth and 17% on-year rise in net interest income.

The core PPoP (pre-provision operating profit) was up 8.4% on year in line with estimates due to a further spike in opex.

The improving liability and asset momentum is a positive, while valuation is undemanding for clear RoE (return on equity) visibility of 15-16%.

The bank is amongst the top picks and a part of the India focus portfolio.

Credit Suisse

The broking house has kept an outperform call with a target price at Rs 960 as growth and asset quality beat estimates even as opex dragged operating profits.

The broking house continues to expect 15% ROE in FY23/24.

Nomura

The broking firm has kept a buy call with a target at Rs 980 as NIM (net interest margin) and asset quality improved.

The liability franchise continues to scale up, Nomura said.

Motilal Oswal

Axis Bank delivered a strong operating performance, led by robust loan growth, higher margin, and controlled provisions. Asset quality improved sharply, aided by controlled slippages and higher recoveries and upgrades.

Restructured loans were in control, while a higher provisioning buffer provided comfort.

"We expect slippages to remain in control, enabling a sustained improvement in credit costs," Motilal said.

"We estimate Axis Bank to deliver FY24E RoA/RoE (return on asset) of 1.6%/16% in FY24E. We maintain our buy rating with a target price of Rs 975/share (2x Sep’23E ABV+ INR134 from its subsidiaries)."

Sharekhan

"We believe its valuations are reasonable and there is potential for re-rating as we expect strong growth. With strong performance on all parameters – loan book, operating performance, and improvement in asset quality -- the bank is poised for robust growth going ahead," Sharekhan said.

"We expect its credit cost to normalise and deliver RoA of 1.5% in FY2023E. Hence, we maintain our buy rating with an unchanged price target of Rs 940."

At 09:19 hrs Axis Bank was quoting at Rs 710.35, up Rs 6 or 0.85 percent on the BSE.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.