Axis Bank shares: Nirmal Bang has raised its FY25E and FY26E estimates for Axis Bank by 5.8 per cent and 8.3 per cent, respectively.
Kotak Mahindra Bank shares: Motilal Oswal said the RBI ban will disturb growth trajectory of retail products and adversely impact overall margins and profitability.
Riding on its March quarter results, Axis Bank Ltd on Thursday pipped Kotak Mahindra Bank to become the fourth-largest lender in terms of market capitalisation (m-cap). A steep fall in shares of Kotak Mahindra Bank following the RBI ban on onboarding customers online and via mobile banking helped, and so did the apex bank’s ban on Kotak’s credit card acquisitions.
Axis Bank shares were trading 4.70 per cent higher at Rs 1,113.65 on BSE, commanding a m-cap of Rs 3,42,488.70 crore. This was higher than Kotak Mahindra Bank’s Rs 3,29,597.28 m-cap, thanks to a 10 per cent plunge in its shares following the RBI ban. This stock was trading 10.03 per cent lower at Rs 1,658.20 on BSE.
Kotak Mahindra Bank commanded Rs 3,66,383.76 crore m-cap on Wednesday. Axis Bank’s m-cap stood at Rs 3,28,365.61 crore, the same day.
A couple of brokerages suggested upside potential for Axis Bank post quarterly earnings.
“Axis Bank reported moderate top-line as the margins improved, however, profitability showed healthy growth. Its assets continue to grow at a healthy pace and the management expect to report growth higher than the industry. Margins are expected to improve as the cost of funds is expected to normalise going ahead,” said Religare Broking, which maintained ‘Buy’ rating on the stock with a target price of Rs 1,275 valuing the standalone bank at 1.7 times estimated FY26 book value.
After incorporating 4QFY24 results, Nirmal Bang has raised its FY25E and FY26E estimates for Axis Bank by 5.8 per cent and 8.3 per cent, respectively. It expects Axis Bank to have average ROA of 1.8 per cent and ROE of 17 per cent over FY24-FY26 on assumption of 15.2 per cent CAGR in loan growth, some compression in NIM in a declining interest rate environment, improving cost ratios and some upward normalisation in credit costs.
“We maintain our BUY rating with a revised target price (TP) of Rs 1,255 (Rs 1,256 earlier), valuing it at 1.9 times March 2026E ABV (2x Dec. 2025E ABV,” Nirmal Bang said.
Axis Bank has announced the re-appointment of Amitabh Chaudhry as MD & CEO till December 2027. Prabhudas Lilladher said Axis Bank is trading at 29 per cent discount to ICICI Bank and this discount should narrow. “We maintain multiple at 2.2x and but as we roll forward to March 2026 ABV our target price increases to Rs 1,400 from Rs 1,250. Retain ‘BUY’,” it said.
Meanwhile, Motilal Oswal said the RBI ban will disturb the growth trajectory of retail products and adversely impact overall margins and profitability of Kotak Mahindra Bank.
“Besides, the IT deficiencies that have continued over the past couple of years, as mentioned by the regulator, do pose a concern, as KMB has been one of the most revered banks when it comes to risk management and overall governance practices. We reiterate our Neutral rating on the stock with a revised target price of Rs 1,900,” it said.
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