Axis Bank Ltd. share price target

21 July 2020 Axis Bank (AXSB) reported in-line 1QFY21 earnings led by strong NII growth, controlled opex and sequential decline in provisions. Even PCR improved 580bp QoQ to 75%. Outstanding funded BB & below pool declined slightly to INR64.2b while moratorium book plummeted to 9.7%, which eased concerns on the asset quality outlook. We have increased our FY21/FY22E estimates by 12%/10% after factoring in higher NII growth and controlled opex, even as we lowered our fee income projections. 1QFY21 PAT of INR11.1b (in-line) was led by strong NII growth and sequential decline in provisions. NII grew 20% YoY (+3% QoQ) to INR69.9b while margins declined 15bp QoQ to 3.4%, impacted by high liquidity and prudent stance on recognizing interest income in the moratorium book. Other income declined 33% YoY (38% YoY decline in fee income). However, this was offset by 25% QoQ decline in opex.

Despite a strong operating performance, Axis Bank reported a net loss of INR 1,388 crore due to a 2.8x increase in provisioning expenditure YoY.

AXSB: Capital raising to fortify balance sheet. Automobiles: Jun'20 Auto Sales Tractors continue to outshine other segments. Oil & Gas: V-shaped recovery in LNG imports

Axis Bank's (AXSB) board today approved a proposal to raise funds not exceeding Rs 150bn this is equivalent to 12.5% of current market capital and 17.6% of Mar'20 net worth.

Axis Bank is the thirdlargest private sector bank in India in terms of asset size, with a balance sheet of ~INR 9tn.

Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses. Due to huge fall in markets , we are revising our price target given in result...

Despite a strong operating performance, Axis Bank reported a net loss of INR 1,388 crore due to a 2.8x increase in provisioning expenditure YoY.

Axis Bank reported steady set of numbers for the March quarter with bank's preprovisioning operating profit growing 17% YoY led by NII growth of 19% YoY. Deposit book remain resilient and grew 17% YoY with CASA ratio at 39%. Loan book grew 15% driven mainly by retail that grew by 24%. It saw improvement in asset quality with GNPA at 4.86% vs. 5% QoQ. It increase its provisioning coverage ratio from 60% to 69% QoQ...

The bank has posted healthy 19% improvement in the Net Interest Income to Rs 6808 crore in Q4FY20 with healthy margins at 3.55%. The operating profit grew by 23% to Rs 23438 crore for FY20 with 16% growth in the NII to Rs 25206 crore. NIM for FY20 was 3.51%. The net profit was Rs 1627 crore for FY20. Adjusted for the one-offs, net profit for FY20 would have been Rs 5182 crore, showing an increase of 11%. On business front, the bank has recorded 19% growth in the deposits on quarterly average balance (QAB) basis, with 13% growth in saving deposits and 11% in current account deposits. Further, the Retail Term Deposits (RTD) were up 33% on QAB basis. CASA ratio was 39% on...

Slippages moderated to | 3920 crore (~3% of advance). Adding back accounts opted for moratorium, slippages would be up 50 bps. Corporate slippages were at | 1839 crore with | 502 crore from the investment book. With downgrade of three accounts (cement, medical devices, auto ancillary sector), stressed book rose ~20 bps QoQ to | 6530 crore. Credit growth was at 15.5% YoY to | 571424 crore. Growth in retail segment remained robust at 24% YoY, led by unsecured portfolio. Corporate book remained slower at 11% YoY while SME witnessed a blip. Deposit increased...