Nomura, a global brokerage firm, issued a ‘buy’ recommendation for Axis Bank, citing attractive valuations and set a target price of Rs 1,250 per share. This target suggests a potential upside of more than 20 percent from the current level of Rs 1,034.Analysts at Nomura anticipate Axis Bank to deliver robust returns on assets (RoAs) or return on equity (RoE) of 1.7 percent or 18 percent, respectively, and expect strong earnings per share (EPS) compound annual growth rate (CAGR) of 16 percent over the period spanning FY24-26F.While acknowledging a possible moderation in loan growth for Axis Bank in the near term, Nomura highlighted their confidence in the bank’s continued strong book value compounding and expressed a favorable view of its franchise.The management of Axis Bank has indicated plans to enhance net interest margins (NIMs) through strategic measures such as improving its balance sheet mix, reducing its overseas loan portfolio, minimizing exposure to low-yielding RIDF bonds, and reinforcing its retail deposit base.
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