Axis Bank Ltd. share price target

Axis bank posted a loss of Rs13.9bn (PLe: PAT of Rs5.0bn) mainly on back of Rs34.0bn of COVID related provisions on moratorium, stress scenarios & overdue a/c, while also made +Rs40bn of provisions on legacy NPAs to significantly improve PCR to 69%, up 950bps QoQ. Main highlight of the commentary was a disclosure of 25% of loans have been opted for moratorium on installments, which starts to reflect actual risk for banks and was not visible as yet. Lockdown extension & further opting of moratorium may add to risks of NPAs ahead but we will have to watch if industry will have...

Axis Bank (AXSB) reported a loss of ~Rs 14bn in Q4FY20 as it built added provisions of Rs 35bn towards Covid-19.

Axis Bank posted mixed numbers for Q4FY2020. While operating results were in line, elevated provisions (especially provisions related to the COVID-19 impact) caused the bank to post a loss. The management indicated that the COVID-19 impact on the economy is likely to be a long period and considerable challenges now exist for players across the board. Net interest income (NII) increased by 19% y-o-y to Rs. 6,807 crore (we expected 16.2% y-o-y), while non-interest income increased by 13% y-o-y to Rs. 3,985 crore (driven by higher recoveries). Retail fees constituted 64% of total fee income. Net interest margin improved by 11 bps y-o-y to...

We expect a modest fourth quarter for our banking coverage followed by a sharp credit slowdown in Q1FY21 as the lockdown impact unravels.

Recent interest rate cuts and government stimulus should provide some relief, however the demand slump amid lockdown is expected to deteriorate credit conditions, making business challenging for Banks. We lower our estimates of Net interest income by 4.4% and 14.9%,...

Loan growth continues but slippages at elevated levels Axis Bank provides wide range of banking services in India. The bank's offerings include cash and credit management services, retail banking,...

Over the medium term, bank expect to reach Cost to Assets of 2%. Bank guided that Q4 credit costs will hinge on recoveries from a pipeline of large cases and on any choices bank make to increase PCR. With near normalization of BB and SMA2 levels, bank remain confident of credit...

As on 31st December 2019, the Bank's Gross NPA and Net NPA levels were 5.00% and 2.09% respectively, as against 5.03% and 1.99% respectively end September 2019. The Bank has recognized slippages of Rs 6214 crore during Q3FY20, compared to Rs 4983 crore in Q2FY20 and Rs 3746 crore in Q3FY19. Slippages from the loan book were at Rs 5124 crore and that from investment exposures stood at Rs 1090 crore. Corporate slippages stood at Rs 3891 crore. 81% of this came from previously disclosed BB and below rated clients (fund based loans, non-fund based loans and investment holdings)....

Asset quality healing and earnings improvement at AXSB have been admittedly slower than expected, however the broader trajectory remains unchanged. Largely stable NPLs and a reduction in std. stress point to this. Our constructive stance remains premised on the leadership and strategic changes at the bank, better underwriting and a healthy B/S (CRAR at 18.7% and PCR at ~59% calc.). We continue to see a steady climb in RoAAs, in spite of our conservative estimates (17% loan CAGR, ~2.8% slippages and 1.7% LLPs). Maintain BUY. AXSBs 3Q operating performance was in-line with estimates. Elevated LLPs continued, and exceeded our estimates, consequently, PAT was ~17% below expectations. While asset quality was largely stable in spite of higher slippages, the BB and below rated loan pool dipped ~18% QoQ. Maintain BUY with a TP of Rs 988(2.75x Dec-21E ABV of Rs 350 + Rs 27 for subs)

Axis Bank reported an impressive growth in net interest income (NII) on account of marginal expansion in net interest margin (NIM) and robust loan growth in loans & advances.