The 49 reports from 17 analysts offering long term price targets
for Axis Bank Ltd. have an average target of 664.21. The consensus estimate
represents a downside of -8.36%
from the last price of 724.80.
3QFY21 numbers indicate a better-than-expected asset quality outcome 3QFY21 results for banks reassured investors that the asset quality impact of the pandemic has been much lower than what was initially expected. Most banks under our coverage reported restructuring of less than 2% compared to expectation of 5-10% initially. Provisioning in 3QFY21 was 9.3% higher QoQ but given the coverage ratios on the existing stock of NPAs, we believe the overall banking sector is at the tail-end of a high credit cost phase. Banks' credit growth picked up, with loans growing 6.8% YoY in 3QFY21 vs 5.8% YoY in 2QFY21. Sequentially, we saw our coverage banks report loan book growth of 3.3% QoQ (1.3% QoQ in 2QFY21, -2.3% QoQ in 1QFY21), thus pointing to continued recovery momentum. Deposits growth, for the entire coverage banks, was healthy at 11.7% YoY and 2.4%...
Lower cost of funds drive Net interest income Axis Bank offers a wide range of banking services in India that includes cash and credit management services, retail banking, investment...
impacted by prudent expense and provisioning charges to the extent of Rs 1050 crore. The bank has posted 14% growth in the Net Interest Income (NII), while NII before interest reversal has moved up 19%. Reported NIM stood at 3.59% for Q3FY21, while NIM before interest reversal was higher at 3.89%. The fee income grew 5% yoy and 6% qoq with retail fee contributing 64% of overall fees. On deposits front, the bank has showed steady growth in stable and granular retail deposits. On QAB basis, CASA plus Retail term deposits grew 16% yoy. CASA ratio at 42%, improved 232 bps...
For Q3FY21, Axis Bank posted a mixed set of results on the operating front as profits were slightly below our estimates owing to higher opex and provisions. Asset quality saw a small blip but the bank has sufficient provisions to absorb any shock and smoothen earnings. Asset quality performance was slightly weak though headline NPA numbers showed improvement, due to Supreme Court order. Proforma NPA increased sequentially reflecting true picture with proforma GNPA and NNPA increasing 27 bps and 16 bps QoQ to 4.55% & 1.19%, respectively....
3QFY21 marks the manifestation of moderately higher provisioning expenses (46bn v/s 45.8bn in the previous quarter) and net profit of 11.2bn against 16.8bn in the previous quarter. As the asset classification stands still, the bank's reported slippages number remains low (0.3bn v/s 9.3bn in 2QFY21) with GNPA and NNPA ratio declined to 3.44% and 0.74% respectively. The Pro-forma GNPA and NNPA ratio were at 4.55% and 1.19% respectively. The bank's PCR has seen further improvement to 79% v/s 77.2% in the previous quarter. Moreover the resolution rate (98%) stood better than pre-Covid level. Furthermore, the BB & below book inched down 1.37% of customer assets v/s 1.4% in the previous quarter. On business front, credit growth (5.9% YoY &...
Lower PAT due to prudent accounting policies Axis Bank (ABL) has reported NII growth of 14.3% YoY and 0.6% QoQ. Reported NIM (overall) expanded (up 2bps YoY and 1bp QoQ) even as interest reversals weighed on yields. Excluding the impact of interest reversals, NIM would have been 30bps higher at 3.89%. Non-interest income was broadly flat (down 0.3% YoY and 0.8% QoQ). 64% of the fee income was from the retail segment. Overall opex grew by 12.4% YoY and 19.3% QoQ on the back of a sharp pick-up in employee expenses, driven by salary increments and one-offs. Cost to income ratio stood at 45.3% (up 141bps YoY and 728bps QoQ). Sequential PPOP decline was primarily due to the...
Axis Bank (AXSB) reported weak earnings, with PAT impacted by lower income and higher opex, while provisions remained elevated. NII income was impacted due to the reversal of proforma slippages. On the business front, retail disbursements were strong QoQ, while disbursements under the ECLGS scheme supported growth in the SME book. AXSB holds cumulative additional provisions of INR119b (~2% of loans). Overall, the bank has approved total restructuring of ~0.42% of loans and does not intend to provide any fresh approvals. The total funded and nonfunded BB & below pool stood at ~2.4% of loans....
Improved NIM, growth in loans and deposits, comfortable cumulative provisions and stable asset quality should aid growth in the upcoming quarters. Hence, we reiterate our BUY rating on the stock with a revised TP of Rs. 603 based on 1.7x FY22E BVPS. Net interest margin expansion helps performance In Q2FY21, Interest income rose by 4.0% YoY to Rs. 16,063cr. However, Net interest income (NII) witnessed a solid growth of 20.1% YoY (+4.9% QoQ) supported by the expansion in Net interest margin of 3.58%, up 7bps YoY and 18bps QoQ basis. The...
Management estimates ~1.2% of customer assets (~Rs75bn) to be restructured, 2/3 of which is expected to come from corporate portfolio and rest from retail/SME. The bank has provided ~20% against this (part of the 1.9% above). Of the corporate restructuring, over half is likely to...
We retain BUY on Axis Bank and increase price target to Rs586 (Rs550 before) underpinnedbyearnings/BVupgrade.Earningshavebeenrevisedupwardsbylifting NIM and core fee growth assumptions. Considering management's assessment of probablerestructuringpoolandencouragingcollectiontrends(demandresolutionat 97%inOct),webelievethatdownsideriskstoourprevailingcreditcostestimateshas diminished.Hence,bank'sreturnratioswillmostlikelyrecoversharplyinFY22.The...
2020. The overall provisions were strong at 124% GNPA end September 2020. The bank has recorded strong 20% surge in the Net Interest Income in Q1FY21. The Net Interest margin (NIM) of the bank improved 18 bps qoq to 3.58% in Q2FY2021. Fees have jumped 67% qoq, while also increased 4% on yoy basis. The bank has improved cost to assets ratio below 2% by 3bps qoq to 1.97%. With the improved...
Credit growth was at 10.5%YoY with retail and corporate segment growing 12% YoY while SME book fell 1% YoY. The bank has been taking a cautious approach in lending towards commercial banking and SME segment while focusing on secured retail loans and highly rated corporates. Over the medium term, the bank expects loan growth to be 500-600 bps higher than the industry growth. Total 80% of retail loans is secured while 82% of incremental loan to corporate are to A- and above category. Deposits grew 8.8% YoY driven by 17% YoY rise in CASA deposit....
Axis Bank (ABL) has reported PAT of Rs16.8bn for 2QFY21 compared to a loss in 2QFY20. On QoQ basis, the PAT grew by 51.3%. The earnings were strong despite the bank continuing with elevated provisioning (up 30.2% YoY, 3.7% QoQ), mainly led by NII growth of 20.1% YoY (4.9% QoQ) and a strong recovery in non-interest income. NIM expanded by 8bps YoY and 13bps QoQ to 3.7% on account of multiple reasons (interest reversal, capital raising, spread). Fee income grew by 67% YoY and 4% QoQ (retail up 82% QoQ). Advances growth stood at 10.5% YoY and 2.7% QoQ, led by 11.9% YoY growth in the retail portfolio and 12.4% growth in the corporate portfolio. In light of the current situation, the management has refrained from giving any...
