Axis Bank shares delivered moderate returns in five years; what analysts say

Shares of Axis Bank Ltd have delivered moderate returns in period up to five years. The stock gained just 53% in five years with its two years returns coming marginally lower at 49.77%. The stock could rally 27.54% in a year but fell over 1% in 2024.

Axis Bank stock has clocked moderate returns even as it is trading near its record high of Rs 1151.50 reached on December 5, 2023. The banking stock fell to its 52-week low of Rs 814.25 on March 16, 2023.

In the last session, Axis Bank shares ended 1.10% lower at Rs 1085.40 on BSE. The banking stock was trading at Rs 1078.05 today. Market cap of Axis Bank fell to Rs 3.32 lakh crore. Total 0.32 lakh shares changed hands amounting to a turnover of Rs 3.41 crore.

Axis Bank has a one-year beta of 0.3, indicating very low volatility during the period.

In terms of technicals, the relative strength index (RSI) of the Axis Bank stock stands at 51.5, signaling the stock is trading neither in the oversold nor overbought zone. The banking stock is trading lower than the 5 day 10 day, 50 day and higher than the 20 day , 30 day, 100 day, 200 day moving averages.

The banking stock has a price to book ratio of 2.45.  In comparison, ICICI Bank stock has a P/B ratio of 4.79, Kotak Mahindra (3.55), HDFC Bank (3.18) and IndusInd Bank (2.67).

The lender has a healthy capital adequacy ratio (CAR) of 17.64. Banks are required to maintain a minimum CAR of 12%.  Other lenders such as ICICI Bank, HDFC Bank, IndusInd Bank and Kotak Mahindra Bank have CAR of 18.34%, 19.26% 17.86%, 17.86% and 21.80%, respectively.

Axis Bank stock has gained 26% in a year and fallen 1.79% in 2024.

Vaishali Parekh - Vice President  - Technical Research at Prabhudas Lilladher advises buying and accumulating this stock for an upside target of Rs 1200.

“Axis Bank has witnessed a decent rally and with a higher high and higher low formation pattern witnessed on the daily chart, it has maintained the uptrend intact. Currently, after a short consolidation phase, it has once again indicated a positive candle with an improvement in the bias to anticipate further rises in the coming days. The RSI is also well placed and is on the rise with the potential to carry on the momentum still further upside. We suggest buying and accumulating this stock for an upside target of Rs 1200, keeping the stop loss near the 50 EMA level of Rs 1070,” said Parekh.

Vaibhav Kaushik, Research Analyst, GCL Broking said, “Axis Bank is under range making consolidation from Rs 1025 to Rs 1150. The stock will move towards Rs 1290 to Rs 1340 if it sustains above Rs 1155. Stop loss should be fixed at Rs 1111.”

Dr Ravi Singh, market expert said, "Axis Bank is prioritizing market share growth in core product segments, aiming to outpace the industry's growth, maintaining the CAR trend. The stock on technical setup is in the neutral zone with most of the indicators showing mix sentiments in the counter. However, the stock is looking bullish on chart patterns and may touch the levels of Rs 1150 in near term."

Abhijeet from Tips2trades said, "Axis Bank is sideways to bearish with strong resistance at Rs 1141. A daily close above this resistance could lead to target of Rs 1205 in the near term. Support will be at Rs 1081."

Jignesh Shial, Director - Research; Head of BFSI Sector at InCred Capital has assigned a hold call to the stock.

“We are skeptical about the pace of growth in terms of building a retail deposit franchise as well as building a secured lending portfolio, margin, and asset quality trajectory in the near term. In the recent past, incremental lending is largely led by unsecured loans which weighs down on capital adequacy given the elevated risk weight on personal unsecured loans, it also increases asset quality risk though aiding yields. Albeit, the yields are partially offset by funding from bulk deposits which come at higher costs. It has the lowest CET-1 ratio among larger banks at 13.7% and a rising share of risk weight assets to total assets (71%), which we beileve makes it inevitable to raise capital. We value the standalone bank at ~1.8x FY25F BV with Rs50/share for subsidiaries and have target price of Rs 1,100 with a HOLD rating on the stock, " said Shial.

Aditya Gaggar Director of Progressive Shares said, “The stock is in the primary uptrend with a Higher Top and Higher Bottom formation and recently it has successfully tested and reversed from the lower end of the rising channel to move in tandem with its uptrend. Oscillators and Indicators are placed well and support the price activity. As per the pattern, the target is Rs 1260.”

Disclaimer:  Business Today provides stock market news for informational purposes only and that should not be construed as an investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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