Synopsis : ICICI Securities places a bullish 'Buy' rating on Axis Bank with a target price of ?1,470, indicating up to 21% upside. The call is backed by attractive valuations, easing credit stress, and improving liquidity conditions.
ICICI Securities has expressed confidence in Axis Bank’s near-term prospects, forecasting up to 21% upside in its share price. With a target of ?1,470 per share, the brokerage has reiterated its 'Buy' rating, citing a combination of compelling valuations, improved macro conditions, and strategic positioning as the core catalysts for future gains.
The private lender saw slower deposit and loan growth in Q4 FY25 compared to peers, leading to some de-rating over the past year. However, net interest income (NII) growth remained aligned with the industry, rising 9% year-on-year. Despite a likely subdued first half of FY26—primarily due to sluggish net interest margins (NIMs) and elevated credit costs—ICICI Securities is optimistic about Axis Bank’s performance in the second half of the fiscal year.
Why the optimism?
The brokerage sees Axis Bank as a major beneficiary of systemic liquidity improvements and stabilising unsecured credit stress, particularly in the credit card and personal loan segments. Senior management at Axis Bank, during recent interactions, acknowledged the macro improvements but offered no formal guidance. Still, ICICI Securities anticipates a pickup in loan growth and improved return on assets (RoA) in H2 FY26.
Valuation remains another key factor. The stock has lagged behind the broader market due to concerns over deposit growth, unsecured retail stress, and senior-level exits. Yet, the current price levels are seen as undervalued, especially considering the bank’s healthy pace of new-to-bank customer acquisitions. The challenge, according to ICICI Securities, lies in deepening wallet share from existing clients—a move critical for long-term sustainability.
Axis Bank’s recent stock performance reflects market caution: it dipped 0.25% over the past week, posted a marginal 0.44% return over the last month, and rose 13.4% over six months. However, it remains down 4% over the past year, making a recovery story plausible for value-driven investors.
As India’s credit cycle enters a more benign phase, Axis Bank could be poised to capitalise on easing headwinds. Investors eyeing mid-term opportunities may find the bank’s current levels attractive, especially with ICICI Securities forecasting a stronger second half for FY26.
Disclaimer : This article is for informational purposes only and should not be construed as investment advice. Please consult your financial advisor before making any investment decisions.
