Axis Bank Ltd. share price target

ICICI Securities Ltd | Retail Equity Research The Reserve Bank of India (RBI) has approved the appointment of Amitabh Chaudhry as MD & CEO of Axis Bank for three years with effect from January 1, 2019 up to December 31, 2021. As directed by RBI, current CEO Shikha Sharma's term would continue until December 31, 2018. Brief profile of Amitabh Chaudhry Amitabh Chaudhry, 54 years, was the Managing Director & CEO of HDFC Standard Life Insurance Company. He has been associated with HDFC Life...

9 September 2018 Mr. Amitabh Chaudhry has been the MD & CEO of HDFC Standard Life since Jan- 10. Mr. Chaudhry started his career in corporate banking with Bank of America in 1987, where he worked in diverse roles ranging from Country Finance Officer, Head of Wholesale and thereafter as MD and Head Technology - Investment Banking, Asia. Mr. Chaudhry was also associated with CLSA as its MD, Head South East Asian Investment Banking and Head Technology Investment Banking. Prior to joining HDFC Life, Mr. Chaudhary worked as MD & CEO at Infosys BPO Ltd. Mr. Post this management change AXSB will have the youngest CEO in Mr. Amitabh Chaudhry, age 54 years, amongst all new private banks - though several banks are going to see a change in top management over next two years.

Axis Bank is the thirdlargest private sector bank in India in terms of asset size, with...

Maintain NEUTRAL. TP of Rs 542 (2x Mar-20 ABV of Rs 271). While AXSBs headline numbers seem encouraging, a deeper assessment suggests otherwise. Growth lagged comparable peers (domestic growth for ICICIBC at ~15% and BOB at ~20%) while margins expanded owing to a one-off (adjusted NIM down 9bps). Though overall fees (up merely 6% YoY) were lacklustre, retail fee growth (+20% YoY) saved the day.

Some bit of relief is seen in asset quality. Slippages have eased to 3.9% as against 15% last quarter. Similarly GNPA as well as provision coverage has improved sequentially. Loan growth is moderate at 14%, driven by retail and SME segment. NII and operating profit growth of 12% and 2% is 5% and 2% ahead of our expectations respectively. PAT has dipped by 46%, better than our expectations of 53% dip. Given the ease in slippages and buoyant guidance, we have cut our slippage estimate by 100bps to 4% for FY19. As a result our ABV estimate is raised by 8.6% for FY20. We retain our HOLD rating with a...

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...