In the past two weeks, Axis Bank has outperformed the market by surging 12 per cent, as compared to a 3 per cent rise in the S&P BSE Sensex.

“Axis Bank’s loan growth in December quarter (Q3FY19) should be better on loan buyouts from non-banking finance companies (NBFCs) and raised MCLRs should benefit yields and marginally NIMs leading to 13-14 per cent NII growth. The credit cost should come off sharply QoQ on lower than trending slippages and stable asset quality driving earnings,” analysts at Prabhudas Lilladher said in a Q3FY19 earnings preview.

“We expect Axis Bank to report around 15 per cent loan growth, driven by continued strong growth in the retail and SME segments. Deposit growth is likely to be around 20 per cent, resulting in an elevated CD ratio of around 99 per cent,” Motilal Oswal Securities said in the results preview.

Margins are expected to expand on a sequential basis to around 3.5 per cent as the loan book re-prices. Though there are some signs of recovery in non-performing loans cycle, we expect slippages to moderate to around 2.9 per cent (from 4.6 per cent a year ago) as the bank proceeds to clean up its balance sheet, the brokerage firm said with ‘buy’ rating on the stock and target price of Rs 750 per share.