Axis Bank shares ended 3 per cent lower on flat on-year net profit in Q4FY25 at ₹7,117 crore, due to muted gains in core and other income growth.
The board recommended a final dividend of ₹1 per equity share.
However, brokerages see upside potential for the stock and has increasing target prices counting on bank’s strong sequential, period-end loan and deposit growth and improving asset quality for Q4FY25. The net interest income (NII) growth was soft.
According to analysts, asset quality improved slightly as slippages were under control.
Nuvama Institutional Equities has maintained buy at an increased target price from ₹1,220 to ₹1,400. It said that Axis Bank has a tightly matched duration (on rates) of assets and liabilities. Better system liquidity will aid deposit growth.
Elara Capital has increased target price to ₹1,485 from ₹1,386 earlier with a buy rating.
InCred Equities raised the target price to ₹1,430, reiterating add call. However, analysts identified a few downside risks such as lower-than-expected deposit growth, delay in operating leverage and deterioration in asset quality.
Motilal Oswal has reiterated neutral rating at a target price of ₹1,300. Credit card portfolio also witnessed some stablisation, “however, the bank is becoming more stringent in classifying loans, which could affect slippages going forward. Additionally, given the rate cut, margins are expected to remain under check,” Motilal report read.
ICICI Securities’ analysts revised the target price from ₹1,320 from ₹1,400, maintaining buy. “Amidst impending pressure on loan yields, we expect growth to be relatively subdued in the near term, though it could see healthy recovery in calendar year 2027 from stable rates and easing liquidity conditions,” they said.
Global brokerage Morgan Stanley also flagged the near-term pressure and has assigned overweight rating at ₹1,300.
The private sector bank on Thursday disclosed its plan to raise ₹20,000 crore by issuance of equity shares or related securities. It also plans to raise ₹35,000 crore through local rupee bonds or foreign currency bonds, additional tier-1 bonds, infrastructure bonds and other debt. It has also increased the borrowing limit to ₹3 lakh crore.
Axis Bank shares ended 3.40 per cent lower on BSE at ₹1,166.30, hitting a low of ₹1,145.75 intraday.