For the quarter ended September 30, Axis Bank reported a 35.5% year-on year increase in net profit to Rs 432.38 crore.
Its asset quality worsened, with gross nonperforming assets rising to 5.9% from 5.03% in the previous quarter.
“The results are a negative read-through for other corporate lenders’ 2Q earnings, given the large divergence in RBI’s audit, and key to watch for are ICICIYes results,“ said Credit Suisse, cutting Axis Bank’s target price by 4.1% to Rs 485.
Motilal Oswal has cut the target price by 13.8% to Rs 470.
“Earnings normalisation for AXSB (Axis Bank) has now been pushed back. Continued pressure on asset quality and protracted earnings recovery will remain a drag on the stock performance,“ said Motilal Oswal, cutting FY18 earnings estimate by 17%.
Edelweiss Securities even downgraded the stock to `hold’ from `buy’, and cut its target price by 14.6% to Rs 545.
CIMB Securities cut it to Rs 610 from Rs 645, CLSA to Rs 612 from Rs 620, and Jefferies to Rs 635 from Rs 675.
The share has lost 12.8% in the last one year. Bloomberg data shows that of the 51 analysts tracking the stock, 22 have a `buy’ rating on it, 16 have a `hold’ rating, and 13 have a `sell’.