Most brokerages are bullish on Axis Bank after the private lender completed its acquisition of Citibank's India consumer and non-banking finance businesses. The deal, announced in March 2022, has been closed for a cash consideration of Rs 11,630 crore and is deemed to be one of the largest deals in the Indian financial services space. With this, Axis Bank gets 30 lakh unique customers of Citibank India, seven offices, 21 branches, and 499 ATMs across 18 Indian cities.

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Here's how different brokerages reacted:

JPMorgan

JPMorgan has given an 'overweight' rating on Axis Bank with a target of Rs 1,100 per share. The brokerage said that lender has indicated no near-term capital raise. The Citibank integration costs could drive marginal FY24 earnings per share (EPS) estimated dilution and basis points could see an 8 percent hit, JPM added.

Diluted EPS is a measurement used to gauge the quality of a company's earnings per share (EPS) if all convertible securities were exercised.

CLSA

CLSA has maintained 'buy' rating on the lender, with a target price of Rs 1,250. The brokerage said that the management-maintained profitability estimates stand at Rs 800-850 crore. It further said that key positive post deal is reduced risk of an immediate capital raise and attrition in business was in between 5-10 percent for cards and deposits.

"Commentary did not suggest steep deterioration in customer retention ahead," it said.

Jefferies

Jefferies has given a 'buy' rating on the bank, while cutting the target price to Rs 1,100 per share. On Citibank acquisition, the brokerage said that it will add 19 percent to cards, 33 percent to wealth assets under management (AUM), 8 percent to current account and savings account (CASA) and 4 percent to loans

"Since March 2022, the franchise has diluted a bit but is adjusted in 6 percent cut to value. We factor earnings changes from merger leading to 53 percent cut to FY23 profit but raise by up to 3 percent for FY24-25 profit," the brokerage said.

The goodwill write-off of Rs 11,600 crore will drive loss in fourth quarter, it added.

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