Neutral on Axis Bank, target price Rs 1,225: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a neutral call on Axis Bank with a target price of Rs 1,225. The current market price of Axis Bank Ltd. is Rs 1195.25. Axis Bank, incorporated in 1993, is a bank with a market cap of Rs 370216.15 crore.

Axis Bank's key products/revenue segments include interest & discount on advances & bills, income From investment, interest and interest on balances with RBI and other Inter-Bank Funds for the year ending 31-Mar-2024.



Financials
For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 39203.77 crore, up 3.72% from last quarter Total Income of Rs 37795.88 crore and up 18.36% from last year same quarter total Income of Rs 33122.23 crore. The bank has reported net profit after tax of Rs 7401.26 Crore in latest quarter.

Investment Rationale
Motilal Oswal has broadly maintained their earnings estimates and expect FY26E RoA/RoE of 1.7%/15.9%. They had earlier downgraded the stock to Neutral in Jan, 24 at Rs 1,090; they believe that while the current valuation looks comforting after a significant underperformance, the watchful stance on several key metrics (deposit growth, credit cost, LCR & CD ratio) will limit near-term stock performance. Reiterate Neutral with a target price of Rs 1,225 (1.7x FY26EABV).

Promoter/FII Holdings
Promoters held 8.29 per cent stake in the company as of 30-Sep-2024, while FIIs owned 51.78 per cent, DIIs 33.11 per cent.