Axis Bank Ltd. share price target

AXSB: Prudent provisioning dampens earnings but fortifies balance sheet. GREENP: Significant all-round beat, outlook bright

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...

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 &...

Axis Bank's Q3FY21 results were below expectations on the profitability front due to elevated overall costs.

Axis Bank' asset quality deteriorated sequentially with GNPA inched up to 4.55% (as per IRAC norms) vs 4.28% led by higher slippage ratio (4.6% vs 1.1% QoQ); however, GNPA improved as against 5.0% YoY led by higher write offs (Rs42.6bn vs Rs27.9bn YoY). BB & below book declined by 5% QoQ and restructured assets stood at 0.42% of customer assets as against earlier estimates of 1.7% are key positives during the quarter. PAT declined by 37% YoY (down 34% QoQ) led by higher provisions (up 33% YoY) and employee expenses (up 23% YoY). NII grew by 14% YoY led by improvement in NIMs at 3.59% (3.57% YoY). PPoP grew by 6% YoY (down 12% QoQ) led by increase in cost to income ratio (45% vs 44% YoY). With management change behind, strong...

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

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.

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...