Axis Bank shares hit all-time high on stellar Q2 earnings

Axis Bank shares rose to their all-time high in early trade today after the lender reported a 70 per cent year-on-year (YoY) rise in net profit for the quarter ended September 2022. Axis Bank stock touched a high of Rs 879.95, gaining 5.77 per cent on BSE. The large cap stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Total 5.15 lakh shares of the firm changed hands amounting to a turnover of Rs 44.69 crore on BSE.

Market cap of the bank rose to Rs 2.68 lakh crore on BSE today. Axis Bank stock has gained 9 per cent in one year and risen 29 per cent since the beginning of this year. In a week, the stock has gained 9.33 per cent. 

Axis Bank stock logged a 70 per cent year-on-year (YoY) rise in net profit at Rs 5,329.77 crore against a profit of Rs 3,133.32 crore in the corresponding quarter last year. Net interest income (NII) in Q2 climbed 31 per cent YoY to Rs 10,360 crore. Net interest margin (NIM) for the quarter came in at 3.96 per cent, up 57 basis points (bps) YoY and 36 bps sequentially. 

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Core operating profit for the quarter climbed 43 per cent YoY Rs 7,802 crore.

YES Securities has maintained a buy rating for Axis Bank. 

"We reiterate BUY rating on Axis Bank with a revised price target of Rs 1135: We had placed Axis Bank as the top pick for the first time in our report dated May 2022. We value the standalone bank at 2.1x FY24 P/BV for an FY23E/24E/25E RoE profile of 14.8/16.5%/16.8%. We assign a value of Rs 120 per share to the subsidiaries, on SOTP," the brokerage said. 

The brokerage gave a target price of Rs 1,135 for the stock, implying an upside of 37% against the current market price of Rs 826. 

ICICIdirect has given a target price of Rs 970 on the stock which can be bought in a range of Rs 780-815. 

ICICIdirect is focusing more on the retail segment, which has a share of nearly 60 per cent (primarily mortgage loans). More than 80 per cent of its unsecured loans are given to the salaried segment, the brokerage said. 

"We believe pedalling business growth with higher share of unsecured loans in incremental business will continue to aid margin uptick. The bank has cumulative provisions of 134 per cent of gross non-performing NPA, which provides comfort on asset quality and earnings volatility," said ICICIdirect.