Private sector lender Axis Bank shares surged in trade on Wednesday, after the firm reported stellar Q3 results for the period October-December. Axis Bank share price jumped 6% to Rs 703 in the morning trade.
Private sector lender Axis Bank shares surged in trade on Wednesday, after the firm reported stellar Q3 results for the period October-December. Axis Bank share price jumped 6% to Rs 703 in the morning trade. The lender has reported a 131% jump in its net profit to Rs 1,681 crore for the third quarter ended as compared to a net profit of Rs 726.44 crore in the comparable period previous fiscal.
Taking stock of the reported results, global brokerage firm CLSA said that earnings rebound ahead along with steady growth can drive a re-rating of the firm. Even though the slippages were higher in the latest quarter, the CEO comfort and better recoveries should abate concerns, note CLSA. The research and brokerage firm has a buy rating on the shares, with a target stock price of Rs 840. The target price implies an upside of nearly 20% from the current price levels. CLSA has raised the bank’s earnings’ forecast by 6% for FY20-21.
Macquarie noted that as there are negligible divergences for FY18, the loan book looks transparent now. The firm has maintained a neutral rating on the stock with a target share price of Rs 620. Macquarie further noted that the headline loan growth looks optically weak, but internals remain strong, there has been no change in EPS.
Axis Bank’s new MD and CEO Amitabh Chaudhry said the the bank’s strategy for the next three years would be essentially focussed on three important vectors – growth, profitability and sustainability. “The developments in the market present us with a tremendous opportunity to improve upon these numbers in short order. Our focus over the next three years on the growth vector would be to improve deposit growth materially to fund our strong loan growth aspirations, establish leadership in payments and digital capabilities and to materially scale up our subsidiaries,” CEO Amitabh Chaudhry said.