Shares of Axis Bank plunged further than 3 at ₹ 806 all on the BSE in Wednesday’s opening deals. Private lender Axis Bank’s standalone net profit jumped 86 to ₹ crore in the alternate quarter ended September 2021, which as per Jefferies, was ahead of estimate backed by lower credit cost The bank showed enhancement on the asset quality front, as the grossnon-performing means (NPAs) or bad loans fell to3.53 of the gross advances by the end of September this time from3.85 in the former quarter. Net NPAs stood at1.08.
During Q2, slippages fell by 16 QoQ to3.9 of once time loans and upgrades/ reclamations were also better. This led to gross NPLs falling by 7 QOQ to3.5 of loans, according to Jefferies. “ Temperance in slippage & low restructuring were positive,”the note stated. The brokerage has maintained its Buy standing on the bank’s stock and raised target price to ₹ (from ₹ 910).
Axis bank said its net exposure to the two advancing companies of Srei Group, which were supplanted by the Reserve Bank of India, stood at zero as they’ve completely handed for the account Another brokerage Emkay has also raised its target price on Axis Bank to ₹ 1020 (from ₹ 960 earlier) as it retains its Buy station. “ Despite slower growth, lower NIMs and advanced opex importing on PPoP ( down 11 yoy), Axis reported a PAT beat substantially due to contained vittles,”it said Slower growth and advanced NPA conformation due to Covid- convinced dislocation, and any sign of operation insecurity, which has moderated a bit lately could act as crucial pitfalls to its call, added Emkay.
Those at Motilal Oswal have maintained Buy on the stock with a target price of ₹ 975 as its asset quality was stable, supported by advanced reclamations and upgrades while its slippages remain elevated. Though, the brokerage remains vigilant of a recovery in the bank’s operating earnings.