Citi has maintained a ‘Neutral’ rating on Axis Bank with a reduced target price of ₹1,290/share following management commentary on the bank’s performance. The brokerage noted that delinquencies in personal loans (PL) and credit cards had risen, with stabilization expected only after 8-15 months. While secured lending in retail and SME segments continues to hold steady, the bank plans to moderate growth in retail unsecured loans.
Deposit growth is seen as a key constraint for Axis Bank’s loan growth, with the management emphasizing a disciplined approach to deposit cost and quality. Seasonal agricultural stress in Q1 and Q3 could pressure credit performance in the near term. Citi pointed out that Axis Bank’s treasury gains may be impacted by new investment guidelines, and its focus remains on core operating profit. While growth moderation and deposit challenges persist, the bank’s proactive approach to credit costs provides some optimism.
