Global brokerage firms maintained their bullish view on Axis Bank after the lender on Friday reported better-than-expected financial results for the quarter ended September 2018.
The private sector lender posted an 83 per cent year-on-year rise in net profit at Rs 790 crore for the quarter ending September on the back of healthy growth in core income and decline in provisions for bad loans.
The lender had registered a net profit of Rs 432 crore in the July-September quarter of 2017-18.
Japanese brokerage firm Nomura raised target price for Axis Bank to Rs 750 from Rs 630 earlier. “Core performance improved along with stability in asset quality. Valuations are undemanding considering improving credit cycle and strong liability franchise,” Nomura said.
Deutsche Bank and CLSA also retained Buy rating on Axis Bank with a target price of Rs 750 each.
“Key positives were moderation of slippages, lower non-performing loans and high coverage. Lower stressed loan formation and corporate de-risking are encouraging. Tad disappointed with a tepid CASA growth,” said CLSA.
Gross non-performing assets (NPA) which came at 5.96 per cent for the quarter was lower than 6.52 per cent reported as on June 30.
Provisions and contingencies decreased to Rs 2,927.38 crore in Q2FY19 over Rs 3,140.41 crore in Q2FY18.
Shares of the bank were trading 1.66 per cent up at Rs 620.05 at around 9.35 am (IST), while the BSE Sensex was down 0.15 per cent at 34,960 at around the same time.
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