Axis Bank gains 3% despite weak Q1 nos; CLSA maintains buy with target Rs 690

CLSA has maintained buy rating on Axis Bank and raised target to Rs 690 from Rs 650 per share.

Shares of Axis Bank gained 3 percent intraday Tuesday as broking house CLSA has maintained buy and also raised target price to Rs 690 per share.

The bank reported a 46 percent year-on-year (YoY) drop in net profit at Rs 701 crore for the first quarter ending June 2018.

The third largest private lender in India had posted 16 percent YoY fall in net profit at Rs 1,305.60 crore in the same quarter last year. It had posted a loss of Rs 2,188.7 crore in the March quarter.

Gross non-performing assets (NPAs) as a percentage of total loans reduced more than expected to 6.52 percent in Q1FY19 from 6.77 percent in Q4FY18 but increased from 5.03 percent in Q1FY18.

Brokerage: CLSA | Rating: Buy | Target: Rs 690

CLSA has maintained buy rating on Axis Bank and raised target to Rs 690 from Rs 650 per share.

The company's top-line is ahead of estimates as retail continues to lead. Also, Q1 net profit ahead of estimates led by better NII and NPL recoveries, said CLSA.

Slippages are moderate, but stress still rises. The de-risking is underway and expect RoE of 15% from FY21, it added.

Brokerage: Kotak Securities | Rating: Add | Target: Rs 600

Kotak Securities has maintain add rating on Axis Bank with a target of Rs 600 per share.

The company's net interest margin was reasonably stronger than expected, while decline in NPLs is quite meaningful.

Higher upgrades, write-off and lower slippages led to decline. Need clarification on movement of sub-investment grade portfolio, it added.

Brokerage: Citi | Rating: Neutral | Target: Rs 610

The research house Citi has maintained neutral call on Axis Bank with a target of Rs 610.

The company's slippages declined, while vulnerable pool rises. Its retail drives loan growth but cost ratios are declining, it said.

It expect gross slippages to continue moderating.

Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 620

Morgan Stanley has maintained overweight rating on Axis Bank with a target of Rs 620 per share.

According to Morgan Stanley, the first quarter was relatively a stable quarter. The coverage on total bad loans was stable.

Now, focus to shift on RBI approval for new CEO, it added.

At 09:54 hrs Axis Bank was quoting at Rs 570.65, up Rs 2.20, or 0.39 percent.

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