Axis Bank Ltd. share price target

Axis Bank shells out a purchase consideration of Rs123bn for Citibank’s India consumer business to acquire: 1) loan portfolio of Rs274bn (accretion of 4% to its advance base) across credit cards, mortgage, personal & ready credit loans, assetbacked finance and small business banking; 2) 2.5mn credit card customer base
(addition of 31% to its base)

customers and increasing granularity (ii) Citi's portfolio would complement that of Axis as both entities have a different customer profile and (iii) it provides good cross sell opportunities to Axis which would eventually lead to synergies. In our view, the deal is positive for Axis Bank in the medium term, however the key is customer retention. With systemic asset quality risk receding and credit growth prospects improving, Axis could be one of the main beneficiaries. We raise the multiple/TP to 2.3x/Rs975 as we roll forward...

AXSB to acquire Citibank's Consumer business for INR123b AXSB announced the acquisition of Citibank's Consumer business in India, including its Credit Cards, deposits, Wealth Management, loans, customer guarantees business, Insurance distribution, and Small Banking business. It also proposed to acquire the Commercial Vehicle and Construction Equipment asset backed financing facilities, Assigned Asset backed financing portfolio, Personal loan portfolio, and servicing of Assigned Mortgages loan portfolio of Citicorp Finance (India). The total consideration of ~INR123b, along with the estimated...

Axis is the third-largest private sector bank in India in terms of asset size, with a balance sheet of >INR9tn.

Axis delivers decent growth, asset quality stable Axis Bank offers a wide range of banking services in India that includes cash and credit management services, retail banking, investment...

loan book were at Rs 3,332 crore and that from investment exposures stood at Rs 815 crore. Recoveries and upgrades from NPAs during the quarter were Rs 3288 crore while write-offs were Rs 1707 crore. Consequently, there were net slippages in NPAs (before write-offs) for the quarter of Rs 860 crore as compared to Rs 707 crore in Q2FY22 and Rs 5,831 crore in Q3FY21. Bank's provision coverage, as a proportion of Gross NPAs stood at 72%, as compared to 75%...

GNPA down 36 bps QoQ to 3.17%. R/s book steady at 0.63% What should investors do? Axis Bank's share price has given ~10% return in the past one year. This was post some correction in past few months. We believe its...

Improvement in all parameters

Fresh slippages fell to INR41.47b (v/s INR54.6b in 2QFY22), while higher recoveries and upgrades at IN32.88b and write-offs of INR17.07b enabled a 36bp/17bp QoQ decline in GNPA/NNPA ratio. Net NPA fell below 1% to 0.91%. We expect AXSB to deliver an FY24E RoA/RoE of 1.6%/16.1% in...