Axis Bank shares climbed 238% from Covid-19 lows: Price targets, valuation, technicals and more

Shares of Axis Bank Ltd have recovered 238% from their Covid 19 lows. The stock which closed at Rs 325.60 on April 3, 2020 stood at Rs 1,100 on February 22, 2024. The private sector lender sector is trading near its record high of Rs 1151.50 reached on December 5, 2023.

The banking stock has a price to book ratio of 2.86.  In comparison, ICICI Bank stock has a P/B ratio of 4.79, Kotak Mahindra (3.55), HDFC Bank (3.18) and IndusInd Bank (2.67).

The lender has a healthy capital adequacy ratio (CAR) of 17.64. Banks are required to maintain a minimum CAR of 12%.  Other lenders such as ICICI Bank, HDFC Bank, IndusInd Bank and Kotak Mahindra Bank have CAR of 18.34%, 19.26% 17.86%, 17.86% and 21.80%, respectively.

Axis Bank stock has gained 32.11% in a year and risen just 0.24% in 2024.

In the last session, Axis Bank shares ended 1.52% higher at Rs 1100.65 on BSE. Market cap of Axis Bank stood at Rs 3.39 lakh crore. Total 1.86 lakh shares changed hands amounting to a turnover of Rs 20.40 crore.

The banking stock hit a 52-week low of Rs 814.25 on March 16, 2023. Axis Bank has a one-year beta of 0.3, indicating very low volatility during the period.  

In terms of technicals, the relative strength index (RSI) of the Axis Bank stock stands at 55.9, signaling the stock is trading neither in the oversold nor overbought zone.

The banking shares are trading higher than the 5 day, 10 day, 20 day , 30 day, 50 day, 100 day and 200 day moving averages. 

Moody's Investors Service has affirmed the bank's 'Baa3' long-term deposit ratings and the bank's 'baa3' baseline credit assessment (BCA) and adjusted BCA. Moody's has maintained the stable outlook on the ratings, where applicable.

Moody's expects Axis to grow loans above the industry's average loan growth of 12%-14 % in the fiscal year ending March 2025 (fiscal 2025), enabling the bank to gain a larger market share.

Axis' healthy net interest margin (NIM), diversified non-interest income, and operational efficiencies support its above industry average profitability. Return on assets for the nine months ended December 2023 was 1.8%, compared with the industry average of 1.2%, said Moody's.

Deven Choksey Research has revised its target price to Rs 1275 from the previous target of Rs 1160.It has assigned a buy rating to the lender.

"The bank continues to focus on gaining market share for its core product segments, with the expectation of seeing credit growth higher than the industry by 400– 600 bps in the coming quarters. We have factored CAGR of 16.2% in advances, 14.9% in NII, 16.3% in PPOP, and 14.9% in Adj. PAT over FY23-26E, driven by positive trends in business momentum and pick-up in synergy benefits coming through CITI business. We have reduced our EPS estimates for FY24E/FY25E by 3.7%/ 8.0%, respectively and rolled over our valuation based on the adjusted book value of FY26E. We have maintained a BUY rating on the shares of Axis Bank," said the brokerage.

 

Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as an investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

 

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