Axis Bank shares jump over 6% as Q3 net profit trebles. Here's what brokerages say on the bank stock
Premium- Axis Bank posted a 224 per cent surge in its third quarter(Q3) net profit year-on-year (YoY) at ₹ ₹3,614 crore
Shares of Axis Bank rallied over 6% to ₹750 apiece on the BSE in Tuesday's session after the company's standalone net profit for the December quarter zoomed nearly three-folds to ₹3,614 crore, as against ₹1,116 crore in the year-ago period .
The bank's core net interest income grew 17% to ₹8,653 crore on the back of a 17% loan growth and a marginal expansion in the net interest margin (NIM) to 3.53%.
“Axis Bank delivered a strong operational performance, with net profit up 224% YoY (a significant beat) aided by robust loan growth, higher margin, and controlled provisions. The management sees a continued progression in 4QFY22 as well," highlighted brokerage Motilal Oswal. It has maintained its Buy rating on the bank stock with a target price of ₹975 per share.
The bank’s gross non-performing assets (NPAs) ratio improved at 3.17% in Q3. The net NPA ratio was at 0.91% in Q3FY22 as against 1.08% in the second quarter.
The private lender's overall provisions came down to ₹1,334 crore from ₹3,757 crore in the year-ago period, and the over ₹5,000 crore in excess provisions for COVID were untouched.
"The stock has seen underperformance (down 17% in 3 months), mainly due to sub-par growth/margin performance vs. peers, which we believe should reverse with the strong Q3 print and better outlook," said Emkay in a note.
It has retained it Buy rating on Axis Bank stock with a target price of ₹1,020. The potential acquisition of Citi's retail/card portfolio and the appointment of EDs will be key near-term events to monitor, as per Emkay.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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