Multiple triggers could boost Axis Bank's return ratios, say analysts

Lower credit cost, operating leverage and shift in loan mix are key positives

Outperforming closest peer ICICI Bank, the stock of Axis Bank has gained a sharp 30 per cent since the start of 2019, when the new Managing Director and Chief Executive Officer Amitabh Chaudhary took charge. Analysts highlight multiple triggers which could boost the bank’s return ratios going ahead. HDFC Securities’ Darpin Shah and Aakash Dattani believe that improving asset quality (with rising coverage), better risk practices, focus on high-yielding retail products, and cost consciousness will drive earnings. This should also improve the return ratio (return on assets and return on equity) of the bank.

Brokerages also expect the trend of