Axis Bank reports a 62% jump in profits after the third quarter. What should investors do?

Axis Bank Q3 results

Axis Bank Growth in Profit

Axis Bank declared its quarterly financial results on 23rd January 2023, and all eyes are on its stock as the company overtook market expectations considerably. The bank delivered an impressive performance in the third quarter bringing its worth to the forefront. Here’s a look at the major metrics of the bank’s quarterly reports.

Axis Bank Q3 FY 23 highlights

  • 62% Year-on-Year (YoY) jump in the net profit grew to Rs.5853 crores.
  • Net Interest Income (NII) jumped 32% YoY and stood at Rs.11,459 crores.
  • The loan segment grew 15% annually to Rs.7.62 lakh crores, and the bank also saw an increase in the net interest margins. The loan portfolio grew through retail and SME loans that the bank disbursed during the quarter. While retail loans jumped 24%, SME loans jumped 17% yearly.

Expert analysis on Axis Bank scrip

After the expectation-beating performance, here’s what experts believe about the performance of the bank’s scrip –

  • ‘Buy’ rating

Many brokerage houses and research firms have given a ‘Buy’ rating on the stock with a target price ranging from Rs.1100 to Rs.1250. Experts have a positive outlook on the stock over the medium term, given the bank’s performance. There are no concerns about asset quality and contingency buffers. They believe that the in the short-run, the bank’s portfolio integration would drive its growth, while in the medium term, the operating leverage will help.

For the last quarter, experts expect another 1% to 3% jump in net profits and the return on equity to be more than 16%.

  • ‘Overweight’ rating

Another brokerage house has rated the scrip ‘Overweight’ with a target of Rs.1200. The firm believes that the profit-to-book value valuation of 1.8X seems positive, and the bank performed comprehensively on the metrics of net interest margin, costs, and fees.

  • ‘Outperform’ rating

A research company has tagged the ‘outperform’ rating on the stock with a target of Rs.1000 given the impressive quarterly performance. The company believes the bank’s stock needs a re-rating in light of its performance. The EPS growth with a healthy margin expansion, CASA growth, and fee growth will lead the stock to outperform the benchmark.

Related - Check out the meaning and calculation of Bank Nifty

  • Neutral

Another research firm maintains its ‘Neutral’ rating on the stock with a target of Rs.790. The reason is the weak liabilities of the bank, which might prove to be a concern. Though the loan portfolio has grown, the growth is lower than other banks in the sector.

What should you do?

Axis Bank is an established bank that can yield returns on your investment over the long term. So, assess what experts say, analyze your risk profile and investment strategy and then make your choice.

Related - Check out the long-duration fund Axis Bank and SBI MF launched.

Axis Bank declared its quarterly financial results on 23rd January 2023, and all eyes are on its stock as the company overtook market expectations considerably. The bank delivered an impressive performance in the third quarter bringing its worth to the forefront. Here’s a look at the major metrics of the bank’s quarterly reports.

Axis Bank Q3 FY 23 highlights

  • 62% Year-on-Year (YoY) jump in the net profit grew to Rs.5853 crores.
  • Net Interest Income (NII) jumped 32% YoY and stood at Rs.11,459 crores.
  • The loan segment grew 15% annually to Rs.7.62 lakh crores, and the bank also saw an increase in the net interest margins. The loan portfolio grew through retail and SME loans that the bank disbursed during the quarter. While retail loans jumped 24%, SME loans jumped 17% yearly.

Expert analysis on Axis Bank scrip

After the expectation-beating performance, here’s what experts believe about the performance of the bank’s scrip –

  • ‘Buy’ rating

Many brokerage houses and research firms have given a ‘Buy’ rating on the stock with a target price ranging from Rs.1100 to Rs.1250. Experts have a positive outlook on the stock over the medium term, given the bank’s performance. There are no concerns about asset quality and contingency buffers. They believe that the in the short-run, the bank’s portfolio integration would drive its growth, while in the medium term, the operating leverage will help.

For the last quarter, experts expect another 1% to 3% jump in net profits and the return on equity to be more than 16%.

  • ‘Overweight’ rating

Another brokerage house has rated the scrip ‘Overweight’ with a target of Rs.1200. The firm believes that the profit-to-book value valuation of 1.8X seems positive, and the bank performed comprehensively on the metrics of net interest margin, costs, and fees.

  • ‘Outperform’ rating

A research company has tagged the ‘outperform’ rating on the stock with a target of Rs.1000 given the impressive quarterly performance. The company believes the bank’s stock needs a re-rating in light of its performance. The EPS growth with a healthy margin expansion, CASA growth, and fee growth will lead the stock to outperform the benchmark.

Related - Check out the meaning and calculation of Bank Nifty

  • Neutral

Another research firm maintains its ‘Neutral’ rating on the stock with a target of Rs.790. The reason is the weak liabilities of the bank, which might prove to be a concern. Though the loan portfolio has grown, the growth is lower than other banks in the sector.

What should you do?

Axis Bank is an established bank that can yield returns on your investment over the long term. So, assess what experts say, analyze your risk profile and investment strategy and then make your choice.

Related - Check out the long-duration fund Axis Bank and SBI MF launched.

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