Why Does Jefferies Continue To Like Axis Bank As A Top Banking Pick?
Global brokerage Jefferies has reaffirmed its positive stance on Axis Bank, maintaining an Accumulate recommendation with a target price of ₹1,700. The brokerage believes the bank is witnessing broad-based operational improvement supported by stronger deposit mobilisation, healthy credit growth and improving asset quality.
Jefferies' Investment View
- Recommendation: Accumulate
- Target Price: ₹1,700
- Status: Continues to feature among Jefferies' top banking picks.
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Deposit Growth Showing Improvement
Jefferies notes that deposit growth has strengthened, driven primarily by the non-retail deposit segment. A healthy deposit franchise provides banks with a stable funding base, supporting future loan growth while helping manage funding costs.
Loan Growth Remains Healthy
The brokerage expects continued momentum in advances, led by:
- Strong corporate lending.
- Healthy SME loan growth.
- Improving retail loan disbursements.
This balanced growth across business segments is expected to support overall earnings expansion.
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Priority Sector Lending To Increase
Jefferies expects the share of Priority Sector Lending (PSL) loans to increase. While this helps the bank meet regulatory requirements, the brokerage believes it may introduce some execution and profitability risks during FY27 that investors should continue to monitor.
Asset Quality Continues To Improve
One of the key positives highlighted by Jefferies is the continued improvement in core asset quality. Better credit quality can support lower credit costs, stronger profitability and healthier return ratios over the medium term.
Key Positives Highlighted By Jefferies
- Improving non-retail deposit growth.
- Strong corporate and SME lending momentum.
- Retail loan disbursements gaining traction.
- Improving core asset quality.
- Continues to rank among Jefferies' preferred banking stocks.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that improving deposit mobilisation, diversified loan growth and strengthening asset quality remain the key drivers for private sector banks. Investors should continue monitoring deposit growth, net interest margins, credit costs and loan mix to assess whether Axis Bank can sustain its earnings momentum over the coming quarters.
Related Queries
- Why is Jefferies positive on Axis Bank?
- What is Jefferies' target price for Axis Bank?
- How is Axis Bank's asset quality improving?
- What is driving Axis Bank's loan growth?
- Why are deposits important for private banks?
Disclaimer: Brokerage reports reflect the opinions of the respective research firm and are not investment recommendations by Indian-Share-Tips.com. Investors should conduct their own research before making investment decisions.
