While the banking index Nifty Bank is just an inch away from making a new high, one of its constituents - Axis Bank (NS:AXBK) touched a new lifetime high in today’s session. This private-sector lender holds a weightage of 11.51% and has a market capitalization of INR 3,62,550, making it the 4th largest bank in the country.
In the last 12 months, FIIs have increased their holdings from 47.86% to 53.84%, as of March 2024. Mutual funds have liquidated a bit of their holdings, from 23.06% to 22.67% in the same period.
The bank reported a record revenue and net income of INR 1,37,989 crore and INR 26,317 crore, respectively. In fact, the net income has been increasing at a 5-year CAGR of a mammoth 88.4%! That’s quite impressive considering the size of the bank.
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Today as the stock jumped to a new high, investors might be thinking about whether they should book profits or hold on for some more time. But before considering the valuations we see whether it is a portfolio stock or not. This is done via a comprehensive financial health check in InvestingPro which gives a score out of 5.
The higher the score the better the company is doing fundamentally. In any case, it should not be lower than 3. In this case, a score of 3, indicating good performance clears the first layer of check.
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The stock has only run up 27.8% in the last one year, and due to its staggering growth, there is still a decent valuation gap of 31%.
The fair value of the stock comes at INR 1,555 quite distant from the CMP of INR 1,187. In fact, out of all 5 financial models used to calculate the fair value, the least intrinsic value came from the P/B multiple, which was INR 1,152. This means all remaining 4 models are pointing to some upside.
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Also Read: Unveiling the Power of Fair Value with InvestingPro+
X (formerly, Twitter) - Aayush Khanna