Kotak Securities has highlighted Axis Bank as one of its top Diwali picks for Samvat 2081, recommending a “Buy” with a target price of ₹1,500. Currently trading at ₹1,197, Axis Bank is expected to offer an upside of 25.3% over the next 12 months. With robust business execution, focused strategic initiatives, and a stable asset quality ratio, Axis Bank is positioned for significant growth in the large private banking sector.
Quick Overview of Key Financials
| Parameter | Value |
|---|---|
| Current Market Price (CMP) | ₹1,197 |
| Target Price | ₹1,500 |
| Upside Potential | 25.3% |
Key Investment Highlights for Axis Bank
- Strategic Business Execution
Axis Bank’s execution is in line with expectations, emphasizing the GPS (Growth, Profitability, and Stability) strategy to build a solid banking franchise. This strategic focus is designed to drive sustainable growth and position Axis Bank competitively. - Granular and Focused Initiatives
Management has emphasized that the bank’s initiatives are targeted and focused on delivering faster-than-industry growth over time. The approach aims to create value through meticulous planning and operational efficiency, especially in the deposits and loan mix. - Profitable Portfolio and Risk-Adjusted Growth
Axis Bank continues to develop a profitable loan portfolio that offers better risk-adjusted growth, helping it maintain a balance between returns and risk management. This positions the bank well for steady growth in the current financial landscape. - Strong Earnings Growth and Stable Asset Quality
In Q2FY25, Axis Bank reported an 18% year-on-year earnings growth, driven by a ~25% increase in operating profits. The asset quality remains stable with slippages at approximately 2%, reflecting prudent risk management practices. - Valuation and Competitive Positioning
Kotak Securities notes that Axis Bank is trading at a valuation that largely addresses key concerns and offers one of the best upsides among large private banks. The target price of ₹1,500 values the bank at approximately 2.2 times its book value and 15 times FY2026E EPS, indicating an RoE of around 15%.
Kotak Securities’ inclusion of Axis Bank in its Samvat 2081 Muhurat Picks emphasizes the bank’s growth potential, stable asset quality, and competitive positioning within the private banking sector. With a target price of ₹1,500, representing a 25.3% upside, Axis Bank is a promising choice for investors looking to leverage opportunities in the Indian banking sector this Diwali.
Disclaimer: This article is based on Kotak Securities’ research and is intended for informational purposes only. Investors are encouraged to consult a financial advisor and refer to the detailed research report before making any investment decisions
