Buy AXIS Bank; target of Rs 1260: Emkay Global Financial

Emkay Global Financial is bullish on AXIS Bank has recommended buy rating on the stock with a target price of Rs 1260 in its research report dated July 27, 2023.

Broker Research

July 29, 2023 / 20:53 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on AXIS Bank

Despite lower margins yet again and rigidly-higher opex (incl. Citi integration cost of Rs3.9bn), Axis Bank is back in the black, given in-line PAT at Rs58bn/1.8% RoA, mainly on higher treasury gains. Similar to 4Q, Bank logged better than expected credit growth, at ~18% YoY (incl. Citi)/22% YoY (ex-Citi in 1QFY23), but margin slipped again (12bps QoQ), with cumulative contraction of 16bps to 4.1% in the past 2Qs. Fresh slippages were higher at Rs40bn/2.2% of loans, but GNPA ratio improved QoQ to 1.9% due to higher recoveries/woffs. Also, Bank retains the contingent provision buffer, at 0.6% of loans. Bank’s CET 1 ratio too improved, by 36bps QoQ to 14.4% (lower vs peers’ at >15%). We expect Axis Bank to clock 1.8% RoA/18% RoE (inflated due to Citi acquisition goodwill w-off) on merged basis (without factoring-in any equity dilution) over FY24-26E.

Outlook

We retain BUY, with revised TP of Rs1,260/sh, valuing the core bank at 2x Jun-25E ABV + subs/investment value at Rs80/sh.

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