ICICI Securities sees nearly 21% upside in Axis Bank and recommends a ‘Buy’ rating on the stock. According to ICICI Securities, the valuation is attractive, and they have a target price of Rs 1,470 on the stock.
The brokerage firm stated that the private lender delivered soft deposit and loan growth compared to its peers in Q4. However, the NII growth has been similar to the industry average, up 9% YoY for FY25.
ICICI Securities sees Axis as a key beneficiary of the easing liquidity and peaking unsecured stress. The brokerage believes that the bank will face a soft first half for FY26, restrained by sluggish NIM, more so in Q2 FY26. Plus, elevated credit costs will also restrain performance in the first half of FY26.
ICICI Securities on Axis Bank: H2 FY26 to be better
The brokerage firm met Axis Bank’s senior management and said that they did not provide any guidance, though they acknowledged the healthy systemic liquidity. “This, in conjunction with the hefty cumulative cut, should aid systemic loan growth, albeit with a lag. Credit card stress appears to be levelling off; personal loans, though, may exhibit some latency, potentially stabilising in the next two quarters,” said ICICI Securities. However, the brokerage expects a better picture on growth and return on assets (RoA) for the H2 FY26.
ICICI Securities on Axis Bank: Valuations attractive
The stock has seen de-rating in the last 12 months due to softer-than-systematic deposits/loan growth, relatively higher stress in unsecured retail, and senior personnel exits. Slower deposit growth could be partly attributed to preferring quality (run-off rate) and keeping a tight leash on funding costs. “The new-to-bank acquisition has been healthy, though Axis needs to step up deepening on existing-to-bank deposits, in our view,” added ICICI Securities.
Axis Bank stock performance
The share price of Axis Bank has fallen 0.25% in the last five trading sessions. The stock has given a return of 0.44% in the last one month and 13.4% in the past six months. However, Axis Bank’s stock price has declined 4% in the last one year.