Axis Bank Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Slippages moderated to | 4337 crore (| 16536 crore in Q4FY18). Accretion from the corporate book was at | 2218 crore, ~88% from exposure rated BB and below. Healthy recoveries and write-off led ~25 bps improvement in GNPA ratio at 6.52% Vulnerable book is now at | 12236 crore (2.5% of customer assets) with restructured asset at ~| 2847 crore & exposure to BB and below rated account at | 10396 crore. As per management, bulk of stress...

While the performance largely mirrored expectations, however persistence inhigher non-corporate slippages further cements our concerns on the SME/Retail book which were flagged of in the last quarter results.

Maintain NEUTRAL with a TP of Rs 539 at 2x Mar-20E ABV. Axis Banks FY18 annual report vindicates our cautious stance on the bank, even as the street has begun to get constructive around the resolution of corporate stress in India. We are skeptical on the large pool of assets below investment grade (Rs 90bn).

Axis Bank Ltd. (AxisB) Q4FY18 performance was adversely impacted by high NPA provisions. Slippage increased by over 3x QoQ due to the RBI's revised guidelines for resolution of stressed assets and thereby GNPA rose by 149 bps QoQ to 6.8% in the reported quarter. We drive comfort from aggressively recognition of NPAs as bulk of stress has now been recognized and watch list at Rs4,280 mn was reduced to 0.1% of advances by Q4FY18. Credit growth at 18% YoY remained healthy and share of low cost deposits base increased to 54%. Recent capital infusion has improved the capital position with CAR at 16.6% which we think is sufficient to...

GNPA has deteriorated by 149bps sequentially to 6.8%. Management has guided NPL formation to remain elevated in H1FY19 and normalize from H2FY19. Robust credit growth of 18%, driven by 23% growth in retail and 27% growth in SME...

Maintain NEUTRAL with a TP of Rs 538 (2x Mar-20 ABV of Rs 269). A massive provision for NPAs (7.56% annu. vs 2.65% QoQ), driven by enormous slippages (~15.4% annu. vs 4.3% QoQ) dragged AXSB into its first ever quarterly loss (Rs 21.8bn) in 4QFY18. Flat core earnings and tepid fee growth (up merely 1% YoY) further dented profitability.

Asset Quality Stress Peaking Out: Maintain BUY Axis Bank has reported the highest ever fresh slippages to the tune of Rs165.4bn (+274% QoQ) in 4QFY18 led by accelerated NPA recognition in BB and below rated corporate book particularly in the power sector. Its GNPA in power portfolio increased to 44% in Mar'18 from 4% in Mar'17. As a result, its provisioning expenses spiked by 178% YoY and 155% QoQ to Rs71.8bn. Further, sharp rise in slippages led to higher interest reversal during the quarter for which the Bank witnessed marginal decline in NII and NIM. Resultantly, the Bank reported 16.1% YoY and 4.7% QoQ decline...

ICICI Securities Ltd | Retail Equity Research Axis Bank's asset quality parameters deeply worsened in Q4FY18. Slippages increased by 3.7x QoQ to | 16536 crore. Around 84% came from the corporate book. Most corporate slippages (~90%) in Q4 came from the BB & below book, particularly the power sector Consequently, the absolute GNPA increased from | 25000 crore in Q3FY18 to | 34249 crore in Q4FY18. The GNPA ratio was at 6.77% New guidelines for resolution of stressed assets drove recognition in...

We retain Hold on Axis Bank with TP revised lower to Rs520. The quarter saw bank upfront a substantial part of its watchlist exposure into NPA (slippages came in at Rs165.4bn or 15% of loans annualised). Resultant, Q4'18 results were lower to our / street estimates on both profitabiity and asset quality front. With large part of stressed assets recognised, focus now shifts towards growth. Loan loss provisions is expected to remain elevated (especially in H1FY19), however with healthy coreoperating profit we expect RoE to scale towards 14-15% levels by end-FY20e....