Axis Bank Shares Jump Back In Green As Earnings Impress Investors, Analysts

Axis Bank’s share price jumped back in the green on Thursday morning halting its five straight session losing streak.

What Happened: Axis Bank reported a net profit of ₹5,863 crore for the quarter ended September. This marks a 10% increase from the ₹5,329.8 crore profit it reported in the same quarter last year.

The bank’s net interest income (NII)  – the difference between the income a lender makes from its lending activities and the interest it pays to depositors – witnessed an 18.9% year-on-year growth, reaching ₹12,314.56 crore in the July-September period compared to ₹10,360.26 crore in the corresponding period.

Net interest margin (NIM) for the quarter was reported at 4.11%, reflecting a slight uptick of 1 basis point quarter-on-quarter and 15 basis points year-on-year.

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For the quarter ending in September, the gross non-performing assets (NPA) decreased to ₹16,756.7 crore from ₹18,158.2 crore reported in the June quarter. Net NPA stood at ₹3,441.3 crore, demonstrating a 7.1% sequential decline.

As of September 30, 2023, the gross NPA ratio was recorded at 1.73%, marking a 23 basis point drop from the 1.96% reported at the end of the June quarter. Similarly, the net NPA ratio came in at 0.36%, reflecting a 5 basis point decrease quarter-on-quarter.

Analyst Reactions: Jefferies maintained its “buy” rating for the stock raising the price target to ₹1,250 from ₹1,200. The research firm noted that the bank’s NIM was stable and there was growth in the loan book. CLSA also maintained its “buy” stance on the private lender with a target price of ₹1,200. The global brokerage said that the bank’s NIM performance was better than its peers.

On the other hand, Macquarie maintained its “neutral” rating for the stock with a price target of ₹980.

Price Action: Axis Bank’s share price was up 0.97% to trade at ₹964.70 at market open on Thursday.

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