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Axis Bank shares jump over 6 percent as Q3 net profit trebles. Here's what brokerages say on the bank stock

25 Jan , 2022   By : Kanchan Joshi


Axis Bank shares jump over 6 percent as Q3 net profit trebles. Here's what brokerages say on the bank stock

Shares of Axis Bank rallied over 6% to Rs750 apiece on the BSE in Tuesday's session after the company's standalone net profit for the December quarter zoomed nearly three-folds to Rs3,614 crore, as against Rs1,116 crore in the year-ago period .


The bank's core net interest income grew 17% to Rs8,653 crore on the back of a 17% loan growth and a marginal expansion in the net interest margin (NIM) to 3.53%.


“Axis Bank delivered a strong operational performance, with net profit up 224% YoY (a significant beat) aided by robust loan growth, higher margin, and controlled provisions. The management sees a continued progression in 4QFY22 as well," highlighted brokerage Motilal Oswal. It has maintained its Buy rating on the bank stock with a target price of Rs975 per share. 


The bank’s gross non-performing assets (NPAs) ratio improved at 3.17% in Q3. The net NPA ratio was at 0.91% in Q3FY22 as against 1.08% in the second quarter.


The private lender's overall provisions came down to Rs1,334 crore from Rs3,757 crore in the year-ago period, and the over Rs5,000 crore in excess provisions for COVID were untouched. 


"The stock has seen underperformance (down 17% in 3 months), mainly due to sub-par growth/margin performance vs. peers, which we believe should reverse with the strong Q3 print and better outlook," said Emkay in a note.


It has retained it Buy rating on Axis Bank stock with a target price of Rs1,020. The potential acquisition of Citi's retail/card portfolio and the appointment of EDs will be key near-term events to monitor, as per Emkay.


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