CLSA has reiterated its ‘Outperform’ rating on Axis Bank with a target price of ₹1,400, indicating a potential upside of 34% from the current market price of ₹1,044.00. The brokerage noted that Axis Bank’s Q3 profit exceeded estimates by 5%, driven largely by lower expenses, even as the topline marginally missed expectations.
CLSA highlighted that credit costs are expected to increase in the current macroeconomic environment, though the Q3 figures were in line with expectations. Loan growth has slowed to below 10% as the bank focuses on balancing profitability, loan-to-deposit ratio (LDR), and capital.
Net interest margins (NIM) were sequentially stable after adjusting for interest reversals and higher liquidity. Operating expenses declined 5% QoQ, aided by the conclusion of Citi merger integration costs, despite festive season-related spending.
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