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Axis Bank's share price today has reached ₹973.10 as of 10.50 am, increasing by 2.64% on Jan 28, 2025. The high is coming after a run of declines, with the stock seeing fluctuations and challenges in the last few weeks.
Let's explore a thorough analysis of Axis Bank's stock, its market indicators, and analysts' recommendations.
Axis Bank shares witnessed some wild price swings in recent days. The stock closed at ₹959.30 on January 27, 2025, with the price going down from the previous weeks, trading above ₹1,000. For the week, the banking stock returned about -1.32% as market sentiment appeared cautious.
Factors such as weaker-than-expected growth in deposits and a rise in NPAs have led to the decline. Credit costs are an area of significant concern for analysts, like slippages on Axis Bank's agricultural and unsecured loans. The Q3 performance by the bank indicates credit costs, now among the highest in the sector, that had dampened investor sentiment.
Despite these challenges, Axis Bank is still one of the largest private-sector banks in India. Thus, analysts still maintain a cautiously optimistic outlook for the stock in the long term.
The market capitalization of Axis Bank stands at ₹3.02 trillion, and the stock is trading with a P/E ratio of 10.79. Such a low P/E ratio means the stock might be undervalued relative to its earnings potential. EPS stands at ₹91.04, which suggests that the bank is highly profitable despite recent challenges.
Additionally, the stock's Beta of 1.10 shows that the stock of Axis Bank is marginally more volatile than the broad market. Thus, indicating that the investors should be prepared for the price movement in the short run.
From a technical analysis perspective, Axis Bank's share price is currently negotiating through critical support and resistance levels. The immediate support is identified at ₹956.10, while the resistance level is around ₹1,044.50. The stock is trading below its resistance level, which means that there could be further downside risks if it doesn't regain momentum soon. Traders will watch these levels closely to gauge the potential for a breakout or further decline.
Axis Bank stock is also trading below its 20-day moving average of ₹1,031.02. This is a bearish short-term trend. However, the fact that it is up by 2.64 percent today hints that some buyers are coming in, which may represent a reversal.
Analysts seem to have mixed emotions about Axis Bank. While some see a recovery in the offing, others continue to be cautious. Here is what some of the top brokerages are saying:
1. Motilal Oswal has a neutral rating on the stock with a target price of ₹1,175. They highlight concerns about Axis Bank's asset quality and the increasing slippage rate. However, they acknowledge the potential for long-term growth.
2. KR Choksey maintains a buy recommendation with a target price of ₹1,283. Thus, suggesting that the stock’s fundamentals remain strong despite recent hurdles.
Despite the recent volatility, Axis Bank is expected to recover in the long term, driven by its strong market position, profitable business segments, and potential for growth in digital banking. Analysts project that the stock could reach ₹1,175 to ₹1,300 in the coming months, depending on how quickly the bank overcomes its current challenges.
Several factors will play a key role in Axis Bank's future performance:
Economic Conditions: A stable macroeconomic environment would fuel growth in credit demand, which would be positive for Axis Bank's loan book.
Regulatory Developments: Changes in monetary policy or banking regulations would impact Axis Bank's profitability and loan growth.
Digital Transformation: Axis Bank's investment in digital banking services is likely to give it a competitive edge, which may attract more customers in a fast-evolving banking landscape.
Axis Bank has shown some good movement in stock price today, but it is still under pressure due to declines in the last few days and cautious market sentiment. Analysts still project long-term growth potential. However, key technical levels along with overall market conditions, must be watched closely.
A relatively low Beta and present P/E, by the industry benchmark, would give investors an attractive view of making it a potentially undervalued buy. Axis Bank stock is perfect for anyone who seeks to position themselves on recovery plays within the Indian banking space. Again, this will be susceptible to volatility in both directions, short term, thus needing caution with exposure.
