July 6, 2023
Top 10 Stock Axis Bank Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Axis Bank – Top 10 Stock in Nifty 50 India Index CNX Nifty 50
Axis Bank is listed as a top 10 stock on July 06, 2023 in the market index CNX Nifty 50 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 37 (37% performer), Obermatt assesses an overall hold recommendation for Axis Bank on July 06, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Diversified Banks |
| Index | BSE Sensex, Good Governace Growth Markets, CNX Nifty 50 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Axis Bank Hold
| 360 METRICS | July 6, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 41 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Axis Bank are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Axis Bank. The consolidated Growth Rank has a good rank of 91, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 91% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 17 means that the share price of Axis Bank is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 83% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 37, which means that the company has a riskier financing structure than 63% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 41, indicating professional investors are more pessimistic about the stock than for 59% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 37, Axis Bank is worse than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 91), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 41), the company is rather risky when it comes to financing (Safety Rank of 37). The negative market view on Axis Bank may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Axis Bank compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Axis Bank only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock Axis Bank is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Axis Bank. Analyst Opinions are at a rank of 95 (better than 95% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Axis Bank. But Market Pulse has a low rank of 26, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 74% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 19, which means that, currently, professional investors hold less stock in this company than in 81% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 41 (less encouraging than 59% compared with investment alternatives), Axis Bank has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Axis Bank Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Axis Bank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Axis Bank. Price-to-Sales is 28 which means that the stock price compared with what market professionals expect for future profits is higher than 72% of comparable companies, indicating a low value concerning Axis Bank's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 28, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Axis Bank. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 29 and Dividend Yield, which is lower than 86% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Axis Bank's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Axis Bank? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Axis Bank? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Axis Bank may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Axis Bank Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% compared with alternatives) for 2023, Axis Bank shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Axis Bank. Sales Growth has a rank of 89 which means that currently, professionals expect the company to grow more than 89% of its competitors. Capital Growth is also above 28% of competitors with a rank of 90, and Stock Returns with the rank of 87 is also an outperformance. Only Profit Growth is low with a rank of 28 which means that currently, professionals expect the company to grow its profits less than 72% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Axis Bank is a good growth stock. ...read more
Safety Strategy: Axis Bank Debt Financing Safety below-average
| SAFETY METRICS | July 6, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Axis Bank has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Axis Bank is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Axis Bank and the other two below average. Refinancing is at 64, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 41, meaning the company generates less profit to service its debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Axis Bank has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Axis Bank are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Axis Bank Below-Average Financial Performance
| COMBINED PERFORMANCE | July 6, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Axis Bank (Diversified Banks, India) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Axis Bank are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives), and are riskily financed (Safety Rank of 37, which means above-average debt burdens) but show above-average growth (Growth Rank of 91). ...read more
RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Axis Bank's financial characteristics. As the company Axis Bank shows low value with an Obermatt Value Rank of 17 (83% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 91% of comparable companies (Obermatt Growth Rank is 91). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 37 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Axis Bank, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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