Axis Bank gains after reports of brokerage upgrade

Axis Bank was up 1.56% to Rs 521.95 at 9:47 IST on BSE on media reports that a foreign brokerage has upgraded its rating on the stock to buy from outperform.

Meanwhile, the S&P BSE Sensex was up 142.10 points or 0.45% at 32,066.51.

On the BSE, 69,000 shares were traded on the counter so far as against the average daily volumes of 5.33 lakh shares in the past one quarter. The stock had hit a high of Rs 522.85 and a low of Rs 518.50 so far during the day. The stock had hit a 52-week high of Rs 547 on 25 July 2017 and a 52-week low of Rs 424.60 on 10 January 2017.

The stock had outperformed the market over the past one month till 10 October 2017, advancing 4.2% compared with the Sensex's 0.75% rise. The stock had also outperformed the market over the past one quarter, gaining 0.82% as against the Sensex's 0.66% rise. The scrip had, however, underperformed the market over the past one year, sliding 3.28% as against the Sensex's 13.68% rise.

The large-cap bank has equity capital of Rs 479.54 crore. Face value per share is Rs 2.

As per reports, the foreign brokerage house said that Axis Bank can see rerating as its asset quality improves, making valuations look attractive after its recent underperformance.

Axis Bank has underperformed the market and corporate lenders by 15-20% on the back of disappointment on asset quality and weak earnings, the brokerage reportedly said. While stress loan ratio is high at 10% of loans, the brokerage said, it is stabilizing now. Moreover, the brokerage said normalisation of credit costs and bottoming of margins will aid better earnings trajectory from second half for the current fiscal onwards.

Axis Bank's net profit fell 16.1% to Rs 1305.60 crore on 1.4% growth in total income to Rs 14052.30 crore in Q1 June 2017 over Q1 June 2016.

Axis Bank is one of the biggest private sector banks in India.

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