Bernstein has maintained its outperform rating on Axis Bank, with a target price of ₹1,480 per share, even as it described the bank’s Q3 performance as mixed.
The brokerage noted that healthy loan and deposit growth helped offset pressure on profitability during the quarter. Advances rose 14% YoY, led by non-retail segments, while deposits grew 15% YoY, reflecting continued balance-sheet momentum.
However, Bernstein pointed out that sequential margin decline and elevated credit costs weighed on earnings. NIMs fell despite a lower cost of funds, largely due to an adverse corporate loan mix shift. Non-interest income also weakened sharply, driven by lower treasury gains.
Asset quality remained stable, though credit costs stayed elevated, limiting earnings upside in the near term. Despite these pressures, Axis Bank managed to sustain RoA at around 1.5%, aided by modest operating expense growth of 7% YoY.
Bernstein believes that while near-term profitability remains under pressure, structural growth in advances and deposits, along with stable asset quality, continues to support its positive medium-term view.
Disclaimer: The views and recommendations above are those of Bernstein. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
