Axis Bank profit missed estimates but loan growth came in at a 7-quarter high and non-watchlist slippages were the best in 3 quarters.

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Rajiv Mehta, executive vice president at YES Securities said the house has been constructive on the stock and they have been carrying an 'add' rating on it for quite some time now. Going forward, they do not see much downside for the stock but believe that any significant upside trigger could be more from a macro perspective, especially when things for the economy start looking up.

The bank, even in a challenging environment has done well in terms of growth and retail asset quality, he said.

"While we have rolled over our valuations to FY22, the upside to our target price has been reined in by the fact that we have also seen cuts in earnings for the current year, as well as for the next year. We do believe that at the current multiples of 1.8 times price to book, the stock is fairly attractive," said Mehta in an interview with CNBC-TV18.

The kind of slippages, that the bank reported in Q3 were elevated and don’t expect them to come through in the coming quarters but expect the level of slippages and the credit cost from to start coming down meaningfully from the second half of the next year,” he said.

In terms of corporate slippages, he added, “The current level of Rs 3,000-4,000 crore could actually come down to a more regularised levels of Rs 2,000-2,500 crore by the second half of the next year, ” he added.

On RBL Bank, he said, “We stand at a ‘reduce’ rating currently but would look out for some trigger to upgrade our rating on the stock." However, till we get some clarity in terms of slippage and credit cost, which in the near-term could remain slightly elevated, we would not want to preempt our rating change at this point in time, he added.