The bank showed improvement on the asset quality front, as the gross non-performing assets (NPAs) or bad loans fell to 3.53% of the gross advances by the end of September this year from 3.85% in the previous quarter. Net NPAs stood at 1.08%.

During Q2, slippages fell by 16% QoQ to 3.9% of past year loans and upgrades/ recoveries were also better. This led to gross NPLs falling by 7% QOQ to 3.5% of loans, according to Jefferies. “Moderation in slippage & low restructuring were positive,” the note stated. The brokerage has maintained its Buy rating on the bank’s stock and raised target price to ₹1,020 (from ₹910).

Axis bank said its net exposure to the two lending companies of Srei Group, which were superseded by the Reserve Bank of India, stood at zero as they have fully provided for the account.

Another brokerage Emkay has also raised its target price on Axis Bank to ₹1020 (from ₹960 earlier) as it retains its Buy stance. “Despite slower growth, lower NIMs and higher opex weighing on PPoP (down 11% yoy), Axis reported a PAT beat mainly due to contained provisions,” it said.

Slower growth and higher NPA formation due to Covid-induced disruption, and any sign of management instability, which has moderated a bit recently could act as key risks to its call, added Emkay.

Those at Motilal Oswal have maintained Buy on the stock with a target price of ₹975 as its asset quality was stable, supported by higher recoveries and upgrades while its slippages remain elevated. Though, the brokerage remains watchful of a recovery in the bank’s operating earnings.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.