Axis Bank Ltd. share price target

Maintain NEUTRAL with a TP of Rs 510 (2xFY19E ABV of Rs 255). AXSBs net earnings beat estimates led by higher treasury gains and lower-than-expected provisions (reversal of std. asset provisions). However, core performance was weak, with 20bps drop in NIM (despite rise in CD ratio and drop in CoF), slower loan growth vs. peers, higher slippages outside the watchlist and optically contained GNPAs (led by higher W/Os). However, the granularity in the B/S (Retail loans +22% YoY) and PL (retail fees +33%) continues to improve.

The bank's quarterly numbers were a mixed bag. While slippages fell to | 3519 vs. | 4811 crore QoQ, slippages from outside the watch list at ~| 2700 crore were on the higher side. The sectors responsible for higher slippages include steel, infrastructure and power GNPA ratio was steady QoQ at 5.03% (| 22030 crore). Watchlist fell 16% QoQ to | 7941 crore mainly comprising power sector (69%). The RA book declined QoQ to | 5487 crore or 1.4% of loans while SDR, 5-25 amount were at | 2029 crore, | 2504 crore, respectively...

Analysis of stressed assets of the Bank clearly suggests that the Bank is approaching the end of recognition of stressed loan cycle, which along with higher PCR clearly indicates sharp moderation in credit cost from FY19 onwards. We have upwardly revised our loan growth estimate to 14-15% from 11% earlier led by pick-up in loan growth from retail SME and corporate working capital segments. Further, we have also upwardly revised our PAT estimates by 23% and 27% for FY18E and 19E, respectively. We upgrade our recommendation on the stock to...

Axis Bank Ltd. (AxisB) reported Q4FY17 numbers which came in line with market expectation. While, NII grew by 3.9% YoY, as net profit during the quarter declined by (-)43.1% YoY to Rs12,251 mn due to the high provisioning against the NPAs. Assets quality remained grim, however due to strong recovery and up-gradation, GNPA ratio reduced 22 bps to 5.0%. Meanwhile, the management remained cautious about resolution of stressed loans and expects credit cost to remain higher over 2% in FY18E. Q4FY17 result analysis: Dismal performance continued by AxisB as it reported...

AXSB's Q4FY17 earnings matched our estimates till operating profit line, however, lower than expected provisions led to 23.4% net profit beat. NIMs showed a spectacular 40bps QoQ expansion though 3.83% remains an unsustainable...

Axis Bank Ltd. reported major drop in Q4 FY17 net profit of 43%. The net profit stood at Rs 1225 cr for the quarter ended March, 2017 vs. Rs 2,154 cr for the same quarter in the previous year on account of higher provisioning for bad loans. However, total income of the bank has increased by 2% to Rs 11,168 cr for quarter under review vs. Rs 10,899 cr for the quarter ended March, 2017. Net Interest Income and Net Interest Margin: The Bank's Net Interest Income (NII) grew 4% YOY to 4,729 crores during Q4FY17 from 4,553 crores in Q4FY16. Net interest margin for Q4FY17 stood at 3.83%. NII for FY17...

AXSBs 4QFY17 earnings beat estimates, but only optically. The NIM improvement was led by a one-off benefit from write back of interest reversals (13bps). One-off recoveries/upgrades and higher write-offs kept GNPAs in check, despite high slippages (incl. the one-off cement exposure).

NII rose to Rs. 4728.6 Cr in Q4FY17 compared to Rs. 4333.73 Cr in Q3FY17. NII increased by 3.87% ( Rs. 176.01 Cr ) when compared with the same period last year.

Headline asset quality numbers like GNPA ratio were steady QoQ at 5.04% (| 21280 crore). Fresh slippages seemed slightly higher QoQ at | 4811 crore. However, of these slippages, ~| 1660 crore was on account of a cement exposure (on which the bank made 25% provision as asked by RBI), which was also upgraded in the same quarter. Thus, excluding this exposure, slippages were relatively lower QoQ. The watchlist declined 15% QoQ to | 9436 crore Fresh slippages primarily came from iron & steel sectors. Of the...