The shares of Axis Bank Limited continued to rally on Wednesday and reached a new 52-week high of Rs 958.90 in the early hours. In the span of a month, the stock has zoomed approximately 8 percent.
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.
The stock is a part of the Indian benchmark NIFTY Bank Index. It constitutes around 12 percent of the index. The stock has outperformed the index as it has rallied by more than 48 percent in the past six months while the benchmark index has zoomed by 30 percent in the period.
In addition to this, the bank also reported robust Q2 results. In the second quarter of FY23, their consolidated net profit rose by more than 70 percent to be at Rs 5,330 crore as against Rs 3,133 crore in the year-ago quarter. Their Net Interest income (NII) in the period stood at Rs 10,360 crore which grew by 31 percent Year on Year from Rs 7,901 crore.
Further, the bank’s asset quality improved during the reporting quarter as its gross non-performing asset ratio dropped to 2.5% from 3.53% in the year-ago period.
HDFC securities remain bullish on the stock and have a ‘Buy’ tag with a target price of Rs 1,195 per share which represents an upside of 28 percent from the current levels.
“Axis Bank is building its medium-term franchise potential ROE (sustainable 15-16%) and shock-proofing the bank from excessive lumpiness across its businesses,” added HDFC Securities.
Written by Anoushka Roy
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