Axis Bank Ltd. share price target

We believe that easing liquidity conditions by the new RBI governor and greater government spending would drive improvement in Axis Bank’s outlook. We see the +ve macro impetus to drive a re-rating in a quality franchisee with a positive risk-reward.

Sluggish Growth

AXSB’s Net Interest Income (NII) grew 8.6% YoY to INR 136,059 Mn in Q3FY25. The Bank’s PPOP (Pre-Provisioning Operating Profit) for the quarter was INR 105,339 Mn, a growth of 15.2% YoY (-1.7% QoQ) led by operating efficiencies.

A Tough' business quarter

Axis Bank continues to report weak credit growth, which has now slipped to 9% YoY; this, along with margin contraction (of 6bps QoQ) and higher retail slippages (net at Rs29bn vs Rs22bn in 2Q) led to elevated provisions.

Yet another soft quarter with moderate advances and deposits growth, with less signs of improvement in the next two quarters

Q3FY25 numbers were weak. Loan growth and deposit growth stood at a multi-quarter low. Slippages were elevated too at 2.3%, a multi-quarter high. Slippages largely attributed to Credit cards, Ppersonal loans, MFI and Agri-portfolio. Asset quality would stablise over the next couple of quarters.

Axis Bank (AXSB) reported 3QFY25 net profit of INR63b (up 3.8% YoY, in line) as lower opex offset higher provisions. In 9MFY25, earnings grew 8.6% YoY to INR192.6b, and we expect 4QFY25 PAT to come in at INR68.4b.

Axis Bank reported another soft quarter with credit growth slipping to 11% YoY, while higher slippages/w-offs led to elevated provisions.

Calibrated growth with improved asset quality

AXSB’s Net Interest Income (NII) grew 9.5% YoY/ 0.3% QoQ to INR 134,832 Mn in Q2FY25. NII was in line with our estimates. PPOP (Pre-Provisioning Operating Profit) for the quarter was INR 107,125 Mn, a growth of 24.1% YoY (+6.0% QoQ) led by higher non-interest income.

Despite 9% YoY growth in NII, Axis Bank (Axis) reported Q2FY25 PAT of INR 69.2bn, up 18% YoY, driven by strong treasury gains (INR 11.1bn) and contained opex.

Axis Bank (AXSB) reported 2QFY25 net profit of INR69.2b (up 18% YoY, 4% beat) as tax reversals and treasury gains offset higher provisions.

Steady balance sheet growth and high non-interest income growth led to healthy 18% y/y PAT growth for Axis Bank.