After Axis Bank posted strong results, here’s what brokerages have to say

Axis Bank Share Prices: Most analysts raised price targets on Axis Bank Ltd. after second quarter, citing prudent provisioning and a strong balance sheet.

The Mumbai-based private lender returned to profitability in the quarter ended September. Its net profit stood at Rs 1,683 crore compared with a net loss of Rs 112 crore a year ago.

The lender’s net interest income, or core income, rose 20% year-on-year to Rs 7,326 crore. Asset quality improved sequentially, while the bank made cumulative provisions worth Rs 4,580 crore during the quarter.

According to Amitabh Chaudhry, managing director and chief executive officer, Axis Bank now has a provisioning buffer worth Rs 10,839 crore for any possible slippage in the future.

That even prompted analysts to either remain bullish or upgrade their investment recommendations for the private lender.

Fee income grew 15 percent on year to Rs 3,344 crore whereas trading profits and miscellaneous income stood at Rs 367 crore and Rs 130 crore, respectively.

Total deposits grew 20 percent on year to Rs 7.7 lakh crore with current account-savings account deposits rising 22 percent. The CASA ratio improved 189 basis points on year to 44 percent.

Overall capital adequacy ratio (CAR) including profit for the first nine months of the current financial year stood at 18.72 percent with common equity Tier I ratio of 15.33 percent.

Out of the 55 analysts tracking Axis Bank, 45 have a ‘buy’ recommendation, nine have a hold, while Goldman Sachs has a ‘sell’ recommendation on the stock. The average of Bloomberg consensus 12-month target price is 17.9%.

Shares of the lender fell as much as 1.8% to Rs 495.60, down for the second straight day.