Investors were cautiously trading in private lender Axis Bank on Wednesday's trading session. On Sensex, the bank has touched an intraday low and high of Rs 767.80 and 760 per piece. After being in Sensex gainer's list in the early hours of the ing session, the bank has reversed its trend and is now trading in the red. At around 1331 hours, the stock was performing at Rs 762.50 per piece down by Rs 3.10 or 0.41%. Interestingly, this can become as a buying opportunity for investors. Because analysts are quite optimistic on Axis Bank shares especially since the bank has seen structural changes in management and operations. In fact, Sharekhan has given a buy rating with a target price of Rs 850 ahead. Hence, grab the shares at low levels.

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Rationalizing their outlook, Sharekhan said, "While the peaking of NPAs and the resultant release in profit are known positives for the bank, we believe that organization restructuring with a robust credit and Risk framework is a sustainable positive for the bank. We believe that the business restructuring as well as drivers like normalization corporate fee income, growth coming from a tail plus midmarket group (avoiding greenfield/ low equity/ nonrecourse of project loans) are steps in the right direction which will augment sustainability and profitability."

At present burn rate, the bank has sufficient capital (Tier I – 13.07%) for ~ 2 years and hence, Sharekhan said, "we don’t see significant exigency on that
front."

Expert here also added, "We believe that Branch size rationalization along with Digital and other means of customer Acquisition (Freecharge etc) will be helpful in keeping the C/I ratio competitive as well as keep the bank future ready."

The Bank currently trades at attractive valuations of 2.4x FY2021E BV.

Considering the renewed focus on business and organizational improvement along with NPA peaking (due to exogenous and internal factors), Sharekhan said, "we find that Axis Bank fundamentals and business model strength have improved. We introduce estimates for FY2021E and roll over the target multiple for the same. We, therefore, maintain our BUY rating with a revised PT of Rs 850."

Axis Bank has been a bull stock on Sensex. It also touched an all-time high of Rs 788.55 per piece by March 2019 end. With such blockbuster performance, Axis has given over 44% return in 1 year's time. This is way higher compared to returns given even by benchmark index Sensex who has risen just by nearly 17% in a year. 

From the current market price, one can still continue to buy Axis Bank has it has further potential for rising by over 11% ahead.