Shares of Axis Bank rose on November 25 as analysts appeared impressed by the lender’s long-term vision at the annual analyst day meeting on November 24.“A convincing analyst meet that Axis Bank could compete on its strengths,” said brokerage firm Kotak Institutional Equities in a note.

Brokerage firm ICICI Securities said that the management of the lender demonstrated its ability to translate ‘intent’ to ‘action’ towards delivering guided outcomes and initiatives undertaken over the last few years to strengthen its capacity to deliver more efficient and sustainable outcomes.

Analysts said that a key takeaway from the management meeting was the lender’s assertion on focusing less on growth and more on customer satisfaction to ensure stickiness. “The premise that a better customer experience would build more stickiness, better revenue at lower risk with more data to monitor would perhaps differentiate the bank in this cycle through better risk-adjusted returns,” Kotak Equities said.

Axis Bank has been able to achieve the targets it had set for itself in 2019 under the new leadership of Amitabh Chaudhary. The lender’s return on equity profile as well as net interest margins is now in line with peers such as ICICI Bank and HDFC Bank after lagging for years. Axis Bank had set a target of achieving a return on equity of 18 percent in 2019 and ended the September quarter of 2022–23 with an RoE of 18.9 percent. Further, its RoE has sustained above the 15 percent mark for the past few quarters and the lender’s Chief Executive Officer Amitabh Chaudhary expects it to sustain above those levels going ahead.

However, a key concern around the lender in market circles has been the sustainability of the recent upswing in performance. Kotak Equities said that the pay-off from Axis Bank’s customer-obsessed strategy will be slow but long-lasting and therefore the lender could be a strong player in the new credit cycle in the Indian economy. “Management articulated strategy across business segments to provide confidence that growth will see a further uptick,” ICICI Securities said.

Currently, 47 out of the 50 brokerage houses that have coverage on the stock have given it a ‘buy’ rating indicating the level of optimism on the Street. The lender is currently trading 19 percent below the consensus price target for its stock at Rs 1,059. At 11:20 am, shares of Axis Bank were up 0.9 percent at Rs 886.8 on the National Stock Exchange.

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