Should you buy Axis Bank shares after Q4 results? Analysts suggest strategy

Axis Bank shares: Axis Bank share price, analysts believe, trades at an inexpensive valuation, making it an attractive bank stock to buy

After Axis Bank’s steady show during the March 2025 quarter, analysts have largely maintained their positive outlook on the stock. 

Axis’s stock, they believe, trades at an inexpensive valuation, making it an attractive buy for sustainable wealth creation. The share price tumbled 5 per cent on the BSE on Friday, hitting the day’s low of ₹1,145.7 per share. The stock recovered a bit, ending the day at ₹1,165, down 3.5 per cent. 

During the January-March 2025 (Q4FY25) quarter, the private sector lender earned a net profit of ₹7,118 crore. This is marginally less than Q4FY24’s figure of ₹7,129 crore. 

Axis Bank’s Q4FY25 net interest income (NII), meanwhile, increased just 5.5 per cent year-on-year (Y-o-Y) to ₹13,810 crore. Net interest margin (NIM) improved 4 basis points (bps) sequentially to 3.97 per cent. This was on the back of around 8 per cent Y-o-Y rise in Axis Bank's total advances in Q4FY25 to ₹10.41 trillion. Total deposits, on the other hand, grew around 10 per cent Y-o-Y to ₹11.73 trillion. 

 

Axis Bank's current account-savings account (Casa) deposits — as a share of total deposits — increased to 41 per cent from 39 per cent in Q3FY25. 

 

On the asset quality front, gross slippages were down quarter-on-quarter (Q-o-Q) to ₹4,800 crore, or 2 per cent of loans. This was due to seasonally lower agri-non performing assets (NPAs) and some stress moderation in the cards portfolio. 

This, coupled with healthy recoveries/upgrades, led to an 18 bps Q-o-Q fall in gross NPA ratio to a decadal low of 1.3 per cent.

Analysts at Emkay Global Financial Services have raised their share price target to ₹1,400, valuing the standalone bank at 1.7 times FY27 adjusted book value (ABV). The brokerage has ascribed a ‘buy’ rating on Axis Bank. 

The bank's credit growth, Emkay Global said, remains below par at 8 per cent Y-o-Y, but better Casa movement, margins, and headline asset quality turned key positives in Q4FY25. 

Going ahead, the management gave guidance that it will focus on deposit granularisation, retail asset quality normalisation, and delivering healthy risk-adjusted return on capital (RaRoC). 

“We believe its margin could come under pressure after the recent rate cuts, given the higher share of repo-linked loans (57 per cent). However, this will be partly offset by contained operating expenses (opex) and credit cost for supporting return on assets (RoA). Though the stock has recently recovered, it still trades at lower valuations for a bank delivering a healthy 1.7 per cent RoA/14-15 per cent return on equity (RoE) over FY25-28,” it said.  ALSO READ | SBI Life stock rises 10% in trade today; Here's what you need to know 

Global brokerage Jefferies, too, maintained its 'buy' rating on Axis Bank stock given the in-line net profit performance in Q4FY25. 

The brokerage expects a 20.2 per cent upside in Axis Bank stock as the lender maintained better net interest margins or NIMs in Q4, compared to peers, despite lagging them on loan growth and asset quality. 

“With improving growth and liquidity, Axis Bank could bridge the 25-35 per cent valuation gap with peers,” Jefferies said on the Axis Bank stock outlook. 

Motilal Oswal Financial Services analysts, however, are 'neutral' on Axis Bank. They believe the bank is becoming more stringent in classifying loans, which could affect slippages. 

“Additionally, given the rate cut, margins are expected to remain under check. We reiterate 'neutral' with a share price target of ₹1,300 (1.6 times FY27 adjusted book value),” the brokerage said.