Jefferies sees 25% upside potential for Axis Bank; assign ‘Buy’ rating with target price of Rs 1250

Jeffries sees 25% upside potential in Axis Bank stocks and has recommended a ‘Buy’ with a target price of Rs 1,250. “We see 16% CAGR in profits (normalised) over FY23-26 and ROE around +18%. Valuations are at +20% discount to ICICI Bank (FY25) and can narrow. Axis stays among our top picks in the sector. Buy, “said jefferies in its report.

At the Analyst Day, the Bank management echoed the pursuit of ‘customer obsession’ that is evident in the ramp-up of the wealth management platform (1 in 3 richest families bank with Axis), hyper-personalisation of digital & branch channels, partnerships with fintechs/ CSCs/tech-platforms among others. Jefferies believes that this is helping improve Net Promoter Score (NPS) and that’s evident in business growth as well.

Jefferies stated that Bharat Banking filling is meeting PSL targets, and the Max Life partnership is progressing well. The bank plans to appoint a Chairman and more directors. Sales engagement is deepening, aiding in achieving PSL targets through the rural network, reducing revenue leakage from RIDF deposits and PSLCs as the bank derives 13% of retail deposits from this channel.

Axis Bank’s stock price rose 1.51% in the last five days, 5% in the last one month, 9.27% in the last six months and 6.50% year to date. The stock price hit its 52-week high of Rs 1,047.50 on September 20, 2023, while it touched its 52-week low of Rs 814.30 on March 26, 2023.