Axis Bank Ltd. share price target

AXSB posted a particularly weak 2Q with (1) A sharp crack in asset quality, as slippages shot up to 10% ann. (2) So far only ~39% of the FY16 watchlist has slipped, pointing towards more upcoming stress, (3) A 900bps decline in coverage even after provisioning tripled sequentially, (4) Additional SDR and 5-25 of Rs 8bn and (5) Opex growth of 6% seq.

And AXSB management now believes slippages could exceed 60% of the watchlist though it did not have guidance on how much more. The management however did state FY17E could see the slippages peak with FY18E being a more mellowed year. Given that ~39% of watchlist has already dissolved due to slippages in H1FY17, the slippage trajectory in H2FY17E is expected be relatively better. Overall, the results and the management commentary reiterates our negative...

Despite slow down in the industry, Axis Bank continues to deliver strong business growth: Axis Bank has been able to outpace the industry growth delivering 19% CAGR in loan book over FY12-16. The key driving force has been the retail business (39% CAGR), whose share has gone up to 41% from 21% during the same period. The management has be..

AXSB reported a weak 1QFY17, led by higher slippages (4.3%), a fall in margins (20bps), slower fee growth (11%) and higher opex ( 23%).

ICICI Securities Ltd | Retail Equity Research Asset quality witnessed enhanced pressure with GNPA ratio at 2.54% (| 9553 crore) vs. 1.67% QoQ. The RA book was at | 7363 crore or 2.1% of loans. Slippages were highest ever at | 3638 crore vs. | 5325 crore in full year FY16. Corporate slippages were 80% at | 2913 crore and of which 92% i.e. | 2680 crore were from the watch list The bank's watch list reduced 10% QoQ to | 20,295 crore. Four accounts amounting to | 790 crore were refinanced under 5/25' &...

8 Asset quality deteriorates sequentially as GNPA/NNPA increased 86bps/33bps to 2.54%/1.08%.SlippagesamountedtoRs36.4bn(outsidewatchlistRs10bn). Managementcomments/concalltakeaways 8 Maintains 60% of original watch list of Rs 226bn to slip over eight quarters (including Q1FY17).FreshrestructuringwasRs9.3bnforoneprojectduetochangeinDCCO. 9 Noncorporate slippages of Rs 10bn is seasonal in nature and will moderate going...

UTI Bank, promoted in 1994, is a new generation and third largest private sector bank. Loan book mix consists of Corporates 46%, Retail & Agri 41%, SME-13%. Fee Income accounts for ~24% of Operating Revenue. For 1QFY17 CAR 15.3%, Tier I - 12.38%, ROE 18.57%, RoA - 1.2%, Cost / Inc 38%. Axis Bank has built a reasonable retail infrastructure, with 3006 branches, 12,781 ATMs with a wide product range. Management aims to expand its physical...

Though operating profit beat our estimates by a good 7.6% (driven largely by a surge in trading profits, Rs9.1 bn, up 41%YoY), the net profit miss (-20.1%) was, unsurprisingly, driven by an ~89%YoY jump in provisions, 86% of which constituted NPA related provisions. This followed AXSB management guidance post Q4FY16 results about imminent slippages from a watch list of Rs226.3 bn. Slippages from watch list constituted Rs26.8bn of the total Rs36.4 bn slippages, the balance being contributed by retail and SME. AXSB ended Q1FY17 with a GNPA ratio of 2.54% from 1.67% in Q4FY16. The statement of comfort-cum-confidence was the management guidance on maintaining a provision coverage ratio of 70%. This commitment is commendable...

Axis Bank's (AXSB) 22% PAT miss was led by 69% miss on provisions and 7% miss on operating expenses. Net income was 5% higher than our estimate, led by strong trading gains of INR9b (13% of net income v/s an average of ~5% over the last three years). While core PPoP growth (+3% YoY) remained tepid, strong loan growth (21% YoY), improving momentum in CASA growth (18% YoY) and continued healthy NIM of 3.8% were the key positives. Stress addition well within guidance, though upgrades disappoint: Slippages increased to an all-time high of INR36.4b (5.1% slippage ratio). 3/4th of the...

We continue to admire core operating performance and business franchise of Axis Bank. However, near-term headwinds clearly suggest relative underperformance compared its peers. Performance of Watch List accounts in 1QFY17 indicates tough time ahead for the Bank on assets quality front. We believe that the Bank will continue to witness elevated level of loan impairment along with higher credit cost, which will keep its earning profile and return ratio subdued over next 3-6 quarters. Hence, we reiterate our HOLD recommendation of...