Axis Bank Downgraded to 'Hold' Rating, But Shows Strong Potential for Growth

Axis Bank, one of the leading private banks in India, has recently been downgraded to a 'Hold' rating by MarketsMOJO on March 11, 2024. This decision was based on various factors, including the company's strong lending practices with a low Gross NPA ratio of 1.58%.
In addition, Axis Bank has shown strong long-term fundamental strength with a remarkable 86.86% CAGR growth in net profits. This is a positive sign for the company's future growth potential. Moreover, the company has consistently declared positive results for the last three quarters, with its Gross NPA at its lowest at 1.58%, NII at its highest at Rs 12,532.15 crore, and interest earned at its highest at Rs 27,961.14 crore.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. With a ROA of 1.6, the stock is fairly valued with a price to book value of 2.4. It is also trading at a fair value compared to its average historical valuations.

Over the past year, Axis Bank's stock has generated a return of 29.67%, while its profits have risen by 15.3%. This indicates a PEG ratio of 1, which is considered fair.

Furthermore, the company has a high institutional holding of 83.51%, which shows that these investors have better capability and resources to analyze the fundamentals of companies compared to most retail investors. In fact, their stake in the company has increased by 1.49% over the previous quarter.

Overall, while the stock has been downgraded to a 'Hold' rating, Axis Bank still shows strong potential for long-term growth and has a fair valuation. Investors should keep an eye on the company's performance in the coming quarters to make informed decisions about their investments.