Axis Bank Ltd. share price target

Axis Bank's (AXSB) Q3FY21 PAT of Rs 11.2bn (36% YoY) was marred by high provisions.

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....

Axis Bank is the thirdlargest private sector bank in India in terms of asset size

In De-risk Mode: Axis Bank s performance on asset quality front has been volatile and has affected company s return ratios in the past.

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...

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...

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....

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...

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...

Axis Bank's (AXSB) Q2FY21 PAT was healthy at Rs 17bn driven by 20% YoY growth in NII and a 16% uptick in operating profit.