Axis Bank slips over 4% post Q4 results; here’s what brokerages have to say

Analysts retained their bullish view on Axis Bank after it posted a 54 per cent growth in standalone net profit at Rs 4,118 crore on Thursday for the quarter ended March 31, 2022. The private sector bank had reported a net profit of Rs 2,677 crore in the same quarter last year.

Shares of the bank traded 4.26 per cent lower at Rs 746.70 in the morning trade on April 29 at around 10.50 am (IST). On the other hand, the benchmark BSE Sensex was up 0.36 per cent at 57,729 at around the same time.

Commenting on the quarterly results, Motilal Oswal Institutional Equities said the bank delivered a mixed quarter, with net profit coming in line with expectations supported by lower provisions, even as margin declined and operating expenditure stood elevated.

“We expect Axis Bank to deliver an FY24 RoA and RoE of 1.6 per cent and 15.7 per cent, respectively. We maintain a Buy rating with a target price of Rs 930 per share,” the brokerage said.

Provisions and contingencies plunged 54 per cent year-on-year (YoY) to Rs 987.23 crore during the quarter under review against Rs 2,167.34 crore in the corresponding quarter a year ago. On the other hand, total expenditure increased to Rs 15,533.60 crore from Rs 13,298.11 crore during the same period.

Asset quality of the lender also improved as the percentage of gross non-performing assets came at 2.82 per cent in Q4FY22 against 3.17 per cent in the preceding quarter ended December 31. The figure stood at 3.70 per cent in the Q4FY21.

With a target price of Rs 1,020, Emkay Global Financial Services also maintained a bullish view on Axis Bank post March quarter results.

“Despite retail-driven healthy credit growth at 15 per cent YoY, Axis Bank continued to report subdued core earnings growth at 9 per cent YoY, mainly led by subdued margins and higher operating expenditure, including a one-time expense related to the Citi portfolio acquisition and business/collection-related spends. However, lower LLP led to a slight beat on profit after tax,” the brokerage house said in a report.

However, it retained a long-term Buy rating on Axis Bank due to a steady improvement in return on equity (RoE) and reasonable valuations. “The bank’s recent opex conundrum and the potential impact on core profitability in the near term will impact the stock’s performance,” Emkay said.

Also read: Axis Bank Q4 results: Standalone PAT rises 54% YoY to Rs 4,118 cr, NII up 17%

Also read: Axis Bank shares tank 5% post Q4 results! What should investors do now?