HSBC has reiterated a ‘Buy’ rating on Axis Bank and set a target price of ₹1,430, citing small but meaningful improvements in cost management, fee income streams, and deposit quality as revealed in the lender’s latest annual report.
According to HSBC’s deep-dive analysis, Axis Bank has demonstrated progressive gains in granular liabilities, notably with a continued increase in salary account additions, which not only aids in maintaining low-cost CASA deposits but also strengthens long-term customer relationships. Additionally, the bank appears to have tightened its control on operating expenses, selectively cutting back on certain cost heads.
One of the standout observations is the strong growth in bancassurance fees, reflecting the bank’s deepening presence in cross-selling financial products and a more integrated customer offering. HSBC notes that while these may seem like marginal gains at first glance, in a competitive private banking landscape, even incremental improvements can serve as significant stock catalysts.
The brokerage’s note reiterates that Axis Bank remains structurally well placed to benefit from India’s credit growth cycle, especially as it enhances return ratios and efficiency metrics. While the stock has lagged behind peers such as ICICI Bank and HDFC Bank in terms of valuations, HSBC believes that a string of such improvements could trigger investor re-rating.
