NPA pain nearing end, beaten-down valuations boost Axis Bank stock over 12%

But, it will take a couple of quarters for earnings to improve and credit cost to normalise

A nearly fourfold sequential jump in slippages owing to an acceleration in non-performing asset (NPA) recognition saw Axis Bank report its first-ever net loss of Rs 21.8 billion in the January-March quarter (Q4), after market hours of Thursday, Yet, the stock soared over 12 per cent on Friday, before closing with 9 per cent gains. What turned investors’ sentiment positive was an expectation of earnings recovery as the NPA recognition or credit cycle was nearing its end. Also, the stock had been under pressure, down over 21 per cent from its 52-week high of Rs 627.50 in January, till Thursday.