Stock overview

Ticker	AXISBANK
Sector	Banking & Financial Services
Market Cap	₹ 3,13,000 Cr
CMP (Current Market Price)	₹ 1,099
52-Week High/Low	₹ 1,340/ ₹ 934
P/E Ratio	11.1 x
Beta	1.2 (Moderate to High volatility)

About Axis Bank

Founded in 1993, Axis Bank has grown into a diversified financial powerhouse, offering retail banking, corporate banking, and wealth management solutions. It has significantly expanded its digital banking services and strengthened its retail loan portfolio over the years, positioning itself among India’s top private sector banks.

Axis Bank has emerged as one of India’s leading private sector banks, known for its aggressive loan book expansion and digital transformation. This report offers a deep dive into Axis Bank’s Q3 FY25 performance, growth drivers, risks, and valuation, helping investors assess its investment potential.

Primary growth factors for Axis Bank

1. Loan growth across focus business segments

• Advances up 9% YOY and 1% QOQ, Retail loans grew 11% YOY and 1% QOQ.
• Small business banking loans grew 20% | 4%, Mid-Corporate (MC) grew 15% | 4% on YOY | QOQ basis
• SBB + SME + MC mix at 2,30,055 crores | 22.7% of loans, up ~7.6% in last 4 years

2. Digital banking expansion

• Open: A mobile Banking app by Axis Bank remains among the world’s top-rated Mobile Banking apps on the Google Play store and iOS app store with ratings of 4.7 and 4.8 respectively; ~15 mn MAU
• The bank boasts of a customer base of 29.3 mn on WhatsApp banking
• Axis Bank has a Credit card CIF market share of 14%, and Retail Card spending grew 11% on a YoY basis.

3. Improving asset quality

• Significant reduction in Gross NPA by 12 bps to 1.46%, indicating better risk management and loan recovery mechanisms.
• Aggressive provisioning has strengthened the Provision Coverage Ratio (PCR) to 76%.

4. India’s economic growth and Infra push

• Government-led infrastructure spending and economic growth at a 6-7% GDP rate will support loan growth.
• Corporate lending demand remains strong, further boosting Axis Bank’s profitability.

Q3 FY25 Financial Performance

Metric	Q3 FY 25	YoY Growth	QoQ Growth
Net Interest Income	13,606 cr	9%	1%
Operating Profit	10,534 cr	15%	-2%
Profit after Tax	6,304 cr	4%	-9%

• Axis Bank reported an impressive 9% growth in Net Interest Income and 15% growth in operating profit in Q3 FY25.
• Profit grew by 4% vs Last year. However, profit growth was subdued on account of higher provisions and overall costs.
• Axis Bank demonstrated a solid performance in Q3 FY 25 amid a volatile market environment and declining industry deposits.

Detailed competition analysis for Axis Bank

Company	Market Cap	Profit	P/E	RoCE
Axis Bank	3,13,000 cr	₹ 6,304 cr	11.1x	7.1%
HDFC Bank	13,25,400 cr	₹ 17,656 cr	18.8x	7.7%
ICICI Bank	8,57,900 cr	₹ 12,880 cr	17.4x	7.6%
Kotak Bank	3,78,300 cr	₹ 4,700 cr	19.3x	7.9%
IndusInd Bank	77,100 cr	₹ 1,401 cr	10.3x	7.9%

• Axis Bank trades at a lower valuation (P/E 11.1x) than HDFC, ICICI and Kotak, making it an attractive growth at a reasonable price opportunity.

Company valuation insights: Axis Bank

As per Discounted Cash Flow analysis:

It estimates the intrinsic value of Axis Bank shares based on expected future cash flows:

• Intrinsic Value Estimate: ₹1,150 per share
• Upside Potential: 14%
• WACC: 11.3%
• Terminal Growth Rate: 4.5%

Axis Bank is trading at an attractive valuation compared to peers, with strong growth catalysts in place.

Major risk factors affecting Axis Bank

1. Interest rate risk: Rising interest rates may pressure NIMs, reducing profitability.

2. Competition from peers: ICICI, HDFC, and Kotak are aggressively expanding, which may limit Axis Bank’s market share gains.

3. Asset quality concerns: While NPAs have improved, a macroeconomic slowdown could increase default rates.

4. Regulatory challenges: Increased regulatory oversight on loan pricing and customer protection may impact growth strategies.

Technical analysis of Axis bank

• Resistance: ₹1,050
• Support: ₹980
• Momentum: Bullish
• RSI (Relative Strength Index): 58 (Neutral)
• 50-Day Moving Average: ₹1,020 
• 200-Day Moving Average: ₹980 

Axis Bank’s bullish structure remains intact, but a breakout above ₹1,050 could signal further upside, while ₹980 serves as a strong support.

Axis stock recommendation by Ketan Mittal

Current Stance: BUY with a 12-month target of ₹1,150.

Rationale:

Outlook: Positive, with moderate upside potential

Strong capital adequacy and deposit growth.

Undervalued stock relative to sector peers.

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Conclusion

Axis Bank presents a compelling long-term investment opportunity, backed by strong retail lending growth, digital expansion, and improving asset quality. While short-term headwinds like competition and interest rate risks exist, the bank’s valuation remains attractive compared to peers, offering investors a reasonable entry point.