iifl-logo

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

Q3FY23 Review: Axis Bank: Positive quarter; outlook remains strong

24 Jan 2023 , 01:02 PM

Axis Bank reported profit of Rs58.5 billion in Q3FY23, which was above estimates of IIFL Capital Services, owing to sharp margin expansion and strong treasury performance and despite higher provisions. Core PPOP grew 54% YoY / 14% QoQ. Reported RoA was 1.9% for the quarter, highest since Q1FY16. Deposit growth being higher than loan growth was a key positive and was against sector trends. Low pace of branch expansion had been a concern with total branches being flat over FY22-Q2FY23. However, Axis Bank has added 89 branches in Q3FY23 as it looks to keep pace with larger private peers. 

Loan growth in focus-segments remains strong and there are no foreseeable asset quality concerns at this point. Return ratios (RoE of ~17%), driven by lower credit costs and healthy core performance (despite higher opex) would be comparable to larger private peers. Stock is trading at 2.0x FY24 BVPS and valuation gap to larger peers could narrow further, hereon. 

Analysts at IIFL Capital Services have raised their earnings estimated by 6% for FY23 and expect Axis Bank to deliver RoA/RoE of 1.7/16.7% by FY24. Their estimates factor in CITI acquisition and Rs125 billion charge to networth in FY24.

They have maintained their Buy recommendation on the stock with a target price of Rs1,090 (2.2x September-2024 BVPS).

 

Related Tags

  • Axis Bank
  • Axis Bank Q3
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Securities Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.