Axis Bank downgraded to 'Hold' rating by MarketsMOJO despite strong fundamentals

Axis Bank, one of the leading private banks in India, has recently been downgraded to a 'Hold' rating by MarketsMOJO. This decision was based on various factors, including the company's strong lending practices with a low Gross NPA ratio of 1.54%. Additionally, Axis Bank has shown a strong long-term fundamental strength with a 46.43% CAGR growth in net profits. This is further supported by the fact that the company has declared positive results for the last 5 consecutive quarters, with its NII(Q) at the highest at Rs 13,448.23 crore and PAT(HY) at Rs 13,164.31 crore.
Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, KST, DOW, and OBV indicating a bullish trend. With a ROA of 1.7, the stock is currently trading at a fair value with a price to book value of 2.3. It is also worth noting that the stock is currently trading at a fair value compared to its average historical valuations.

However, despite these positive aspects, the stock has underperformed the market in the last 1 year, generating a return of 23.23% compared to the market (BSE 500) returns of 37.44%. This could be a cause for concern for investors.

It is also worth mentioning that Axis Bank has a high institutional holding of 85.06%, indicating that these investors have better capability and resources to analyze the fundamentals of the company compared to retail investors. In fact, their stake in the company has increased by 1.1% over the previous quarter.

Overall, while Axis Bank has shown strong fundamentals and positive results, it is currently facing some challenges in terms of market performance. Investors may want to hold onto their positions and monitor the stock closely for any changes in its performance.