Axis Bank gains 1% after CLSA raises price target to Rs 800

Axis Bank gained a percent in morning on Thursday after global brokerage house CLSA increased price target to Rs 800 from Rs 750 earlier, implying 20.5 percent potential upside from January 16’s closing levels.

While maintaining a buy call on the stock, the research house said more management changes are likely at the top level as new CEO has been preparing a new team.

On December 31, 2018, Shikha Sharma retired from the services of the bank and has accordingly ceased to be the Managing Director & CEO of the bank.

Now Amitabh Chaudhry is the new Managing Director & CEO of the bank with effect from January 2019 on the terms and conditions relating to the said appointment, including remuneration, as approved by the RBI.

The clarity on new strategy/execution quality will drive next leg of stock returns, it said, adding cyclically, the bank is in a sweet spot as it exited NPL recognition.

Hence, CLSA sees return on equity improving to 15 percent by FY21. The warrant conversion in FY20 will lift net worth by 3 percent, it said.

At 09:49 hours IST, the stock was quoting at Rs 666.95, up Rs 3.30, or 0.50 percent on the BSE.

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