AXISBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | AXISBANK | Market Cap | 3,94,265 Cr. | Current Price | 1,268 ₹ | High / Low | 1,418 ₹ |
| Stock P/E | 16.1 | Book Value | 657 ₹ | Dividend Yield | 0.08 % | ROCE | 6.07 % |
| ROE | 12.7 % | Face Value | 2.00 ₹ | DMA 50 | 1,302 ₹ | DMA 200 | 1,247 ₹ |
| Chg in FII Hold | -0.54 % | Chg in DII Hold | 0.70 % | PAT Qtr | 7,071 Cr. | PAT Prev Qtr | 6,490 Cr. |
| RSI | 42.2 | MACD | 8.89 | Volume | 1,72,48,371 | Avg Vol 1Wk | 1,13,15,889 |
| Low price | 1,041 ₹ | High price | 1,418 ₹ | PEG Ratio | 0.44 | Debt to equity | 7.69 |
| 52w Index | 60.2 % | Qtr Profit Var | -0.65 % | EPS | 78.7 ₹ | Industry PE | 15.0 |
📊 Financials: AXISBANK shows moderate fundamentals with ROE at 12.7% and ROCE at 6.07%. EPS is healthy at ₹78.7, supported by quarterly PAT of ₹7,071 Cr. (slightly down from ₹6,490 Cr., -0.65% variation). Debt-to-equity ratio is high at 7.69, typical for banks but adds leverage risk. Dividend yield remains low at 0.08%, limiting shareholder returns.
💹 Valuation: The stock trades at a P/E of 16.1, close to the industry average of 15.0, suggesting fair valuation. The PEG ratio of 0.44 highlights undervaluation relative to growth. Book value is ₹657, giving a P/B ratio of ~1.93, which is reasonable for the banking sector.
🏢 Business Model & Competitive Advantage: AXISBANK operates in the banking sector, benefiting from credit growth and diversified financial services. Its competitive advantage lies in scale, strong EPS, and institutional support. However, modest ROCE and high leverage reduce efficiency compared to peers.
🎯 Entry Zone: A favorable entry zone lies near ₹1,240–₹1,270 (close to 200 DMA support). Current price of ₹1,268 is within this zone, offering a balanced risk-reward setup.
📈 Long-Term Holding Guidance: Suitable for long-term investors given fair valuation and growth potential. Holding is justified if credit growth sustains and asset quality remains stable. Profit booking near ₹1,380–₹1,400 resistance is advisable.
Positive
- EPS at ₹78.7 supports earnings visibility
- PEG ratio of 0.44 indicates undervaluation
- Quarterly PAT remains strong at ₹7,071 Cr.
- DII holdings increased (+0.70%), showing domestic institutional confidence
Limitation
- ROCE at 6.07% is modest
- High debt-to-equity ratio (7.69), typical for banks but adds risk
- Dividend yield is negligible at 0.08%
- RSI at 42.2 indicates weak momentum
Company Negative News
- Quarterly profit variation slightly negative (-0.65%)
- FII holdings declined (-0.54%), showing reduced foreign investor confidence
Company Positive News
- Strong EPS and fair valuation metrics
- DII holdings increased (+0.70%), providing institutional support
Industry
- Banking sector trades at industry P/E of 15.0, close to AXISBANK’s 16.1
- Sector benefits from credit growth but faces risks from interest rate cycles and asset quality
Conclusion
⚖️ AXISBANK is a fundamentally fair candidate with strong EPS and undervaluation per PEG ratio. Entry near ₹1,240–₹1,270 offers a good risk-reward balance. Long-term holding is justified if credit growth sustains and asset quality remains stable, with profit booking near ₹1,380–₹1,400 resistance.