CLSA maintained its buy rating but raised its target price to Rs 890 from Rs 840 earlier while Jefferies has put out the most aggressive target on Axis Bank of Rs 960.
The Axis Bank stock has been in an uptrend in 2019 so far, up nearly 20 percent. That also reflects in the fact that the private sector lender turned profitable in the March quarter compared to loss reported in the year-ago period.
It posted a profit of Rs 1,505 crore for the quarter ended March 2019 on better asset quality and decline in slippages.
In January-March quarter, it set aside Rs 1,300 crore for provisioning against self-identified stressed assets, over and above the regulatory norms, as part of its new “conservative” approach under the new leadership.
Reacting to the earnings, CLSA maintained its buy rating but raised its target price to Rs 890 from Rs 840 earlier. Jefferies has put out the most aggressive target of Rs 960 which translates into an upside of nearly 30 percent from April 25 closing price of Rs 740.
NPLs were stable but CASA disappointed. Pick-up in CASA is key in supporting its growth ambitions, said the CLSA note.
Stable delinquencies helped bring gross NPLs down to 5.8 percent. Earnings should see a turnaround from FY20, said the note. The bank may look to raise capital over the next 12-18 months which is also positive.
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