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Out of the many categories of stocks, Blue-chip stocks are considered a safer choice. It is because they typically have solid balance sheets, steady cash flows, and proven business models. Along with this, the stock prices increase steadily and give significant returns. 

Here are 2 Bluechip stocks recommended by analysts for an upside of up to 43% post their Q3 results: 

Axis Bank Limited 

The shares of Axis Bank Limited were trading 3 percent lower at Rs 907 levels till the afternoon on Tuesday. The stocks slipped despite posting strong quarterly earnings. 

On a consolidated basis, their Net Interest Income (Interest earned-Interest expended) stood at Rs 11,748.59 Crores which was an increase of 33 percent Year on Year from Rs 8858.02 Crore. Their net profit in the period zoomed by 56 percent to Rs 6209.37 Crore up from Rs 3973.07 Crore in the same period a year earlier. 

The Bank’s total advances grew by 15% year-on-year and stood at Rs 7.62 lakh crore. Retail loans grew by 17% since last year and accounted for 56% of the bank’s net advances. 

The asset quality for the lender improved as the gross non-performing asset ratio fell by 12 basis points sequentially to 2.38%. The net NPA ratio, too, improved to 0.47% from 0.51% as on Sept. 30. 

CLSA has a ‘Buy’ rating on the stock and raised the target price to Rs 1,250 per share which represents an upside of 38% from the current levels. 

“The rising margin is an industry phenomenon and moderation in opex growth is positive. The benign credit cycle continues and opex heading in the right direction, while retail deposit mobilisation remains a key deliverable,” the brokerage highlighted. 

ICICI Bank Limited 

The shares of the private lender were trading marginally higher in green at Rs 873 levels. The bank posted strong numbers which led the analysts to increase their targets on the stock. 

The bank’s net interest income (NII) rose 34 percent to Rs 18,640.92 crore from Rs 13,941.88 crore in the corresponding quarter last year. Their net profits jumped by 35 percent to Rs 8,792.42 crore up from Rs 6,536.55 Crore in Q3FY22.

The bank’s total period-end deposits increased by 10.3 percent YoY to Rs 11.2 lakh crore. The retail loan portfolio grew by 23.4 percent YoY and comprised 54.3 percent of the total loan portfolio as on December 31, 2022. 

The gross NPA ratio declined to 3.07 percent for the third quarter of the fiscal year 2022-23 from 4.13 percent last year. The net NPA ratio declined to 0.55 percent from 0.85 percent last year. 

Morgan Stanley has kept an overweight rating on the stock with a target of Rs 1,250 per share, representing an upside of 43% from the current levels. 

The brokerage said the lender reported another strong quarter with growth of 30 percent in core pre-provision operating profit (PPoP) but added that the question remains whether this rate can be sustained at 18-20 percent in two financial years ending March 2025. 

Written by Anoushka Roy

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