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The shares of this third-largest private sector bank declined by 2.73% to an intraday high of ₹1,017.10 apiece on Friday. Despite receiving a buy recommendation from the global research and broking firm Jefferies with an upside potential of 36%, 

On Friday at 1:30 p.m., Axis Bank Ltd shares were priced at ₹1,012.35 on the National Stock Exchange, reflecting a 1.15% decline from the previous day’s closing price. The company’s market capitalization is currently ₹3,12,655 crore. 

Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture, and Retail Businesses. 

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The company’s shares have surged by approximately 15% in the last 12 months.In the fiscal year 2022-23, the company witnessed a 27% rise in revenue, reaching ₹87,448 crore compared to ₹64,696 crore in FY21-22. However, the net profit saw a decline of 23%, dropping from ₹10,919 crore to ₹14,207 crore during the same period. 

Jefferies, a global research and broking firm, has initiated coverage on Axis Bank Ltd. with a strong outlook and set a target price of ₹1,380. This represents a 36 percent increase from Friday’s closing price of ₹1,012 per share. 

The company’s management plans to discuss raising capital prospects on April 24, along with presenting the results, as mentioned by the brokerage. 

The company’s Common Equity Tier 1 (CET-1) Capital Adequacy Ratio (CAR) stands at 14%. The upcoming investment in Max Life is expected to consume an additional +15 basis points. 

The brokerage highlighted that an increase in capital equivalent to 15% of the net worth, amounting to ₹20,000-25,000 crores, would raise the CAR by 160 basis points, increase the Book Value Per Share (BVPS) by 4-6%, and dilute the Return on Equity (ROE) by 100 basis points to 17%. 

Written by Omkar Chitnis

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