Buy This Large Cap Banking Stock For 37% Potential Upside, Recommended By ICICI Direct

ICICI Direct Research is bullish on Axis Bank Ltd, recommends 'buy' the stock of the company for a target price of Rs 970 apiece. The brokerage sees a potential gain of 37%. Axis Bank is the third largest private sector bank in India with a balance sheet size of Rs 11.5 lakh crore as on June 2022. The bank has a large footprint across India with 4759 branches. Retail and SME comprise ~69% of total loans.

Stock Outlook & Returns

The Current Market Price (CMP) of shares of Axis Bank is Rs 710.10 apiece. Today, it was opened at Rs 707.95 apiece on NSE. Currently trading above 0.52% from its previous close. The stock is trading above Rs 91.85 from its 52-week low on NSE. The stock is likely to gain around 37% in 12 months if the stock is brought at the CMP, considering the estimated target price of Rs 970 per share.

The stock in terms of return on investment has given mixed returns on tenure. In the last 1 week, it gained 0.21% and in the last 1 month, it gained 11%, respectively. Over the last 1 year, its share price has fallen 3.35% and 3.1% in the past 3 years, respectively. It has given a positive return of 34.79% in the past 5 years.

The stock's ROE is 11.93%. On NSE, the stock's 52-week low is Rs 618.25 apiece, recorded on 23rd June 2022 whereas, the 52-week high is Rs 866.90 apiece, recorded on 25th October 2021.

Stock Details
CMP	Rs 710.10
Target Price	Rs 970
Potential Upside	37.00%
Market Cap	Rs 217933 Cr
ROE	11.93%

Q1FY23 Results - Profit driven by lower credit cost

• NII up 21% YoY and 6.4% QoQ, NIMs up 11 bps QoQ to 3.6%.
• Provisions down 64% QoQ, PAT up 91% YoY Rs 4125 crore.
• Loan growth at 14% YoY to Rs 7.01 lakh crore. Retail book up 25% YoY.
• GNPA down 6 bps QoQ to 2.76%. R/s book was at 0.45% of GCA.

ICICI Direct Suggests Buy For a Target Price of Rs 970 apiece

Commenting on the valuation, the brokerage said, "Axis Bank's share price has given flattish returns. However, we believe as operational performance improves and also synergy benefits from the CITI acquisition come into play, it would reflect positively on price performance as well. We retain our BUY rating on the stock. We value Axis Bank at ~2.3x FY24E ABV and maintain our target price at Rs 970."

About - Axis Bank Ltd

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 Bank has a large footprint of 4,758 domestic branches (including extension counters) with 10,990 ATMs & 5,972 cash recyclers spread across the country as of 31st March 2022. The Bank has 6 Axis Virtual Centers with over 1,500 Virtual Relationship Managers as of 31st March 2022. The Overseas operations of the Bank are spread over eight international offices with branches.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct Research. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.