Axis Bank Ltd. share price target

Axis Bank Ltd Q3FY18 results comment NII rose to Rs. 4731.52 Cr in Q3FY18 compared to Rs. 4539.62 Cr in Q2FY18.

Maintain NEUTRAL with a TP of Rs 596 (2x Mar-20 ABV of Rs 298). AXSBs 3Q reported profits rose 25% YoY, but a deeper assessment suggests otherwise. Better asset quality (G/NNPA -62/56bps QoQ) owes more to higher write-offs (Rs 28.2bn) and NPA sale (~Rs 20bn). Retail and SME slippages shot up, too. NIMs, surprisingly, dipped to 3.38% (11bps QoQ) despite robust loan growth (+21% YoY), CD ratio (~103%, +440bps QoQ) and slippages moderating to 4.26% ann. (-460bps QoQ). Stagnant SA deposits disappointed vs peers.

ICICI Securities Ltd | Retail Equity Research Axis Bank reported an overall healthy quarter Slippages were at | 4428 crore vs. | 8936 crore QoQ. Absolute GNPA was at | 25000 crore vs. | 27402 crore QoQ. GNPA ratio was at 5.28% vs. 5.9% QoQ while PCR increased to 66% vs. 60% QoQ...

NIM dropped by 7bps sequentially, management hinted NIMs have bottomed NII as well as PAT is 4% and 34% below our estimates Key Highlights and Investment Rationale Outlook: Management keeps on changing its goalpost in terms of outlook on asset quality. From its earlier guidance on slippages from watch list which they eventually revoked, is now targeting against the pool of assets rated BB & below which is indeed fairly large (Rs161bn). Current pool of watchlist, restructuring and outstanding security receipts stands at 3.6% of loan book. Although slippages are likely to see a...

Axis Bank registered a 6% rise in Interest income to Rs 11721.55 crore in the quarter ended December 2017. A 3% rise in interest expenses to Rs 6990.03 crore saw net interest income (NII) grow 9% to Rs 4731.52 crore. Other income fell 24% to Rs 2593.08 crore, which took net total income down 5% to Rs 7324.60 crore. Operating expenses grew 12% to Rs 3470.80 crore, after which OP fell 17% to Rs 3853.80 crore. Provision and contingencies fell 26% to Rs 28113.04 crore after which PBT jumped 23%...

AXSB reported a sharp improvement in asset quality, while net profit grew 25%YoY/68% QoQ to INR7.26b. NII stood at INR47.3b (~2.5% ahead of our estimates), representing 9% YoY growth. This occurred despite margin compression of 7bp QoQ (19bp contraction over FY17). Other income declined 24% YoY to INR25.93b due to weak treasury gains, even as core fees grew 24% YoY. This, coupled with a moderate rise in opex, led to a17% YoY decline in PPoP. Loan growth stood healthy at 21% YoY (+29% YoY in retail; +27% YoY in SME). Deposit base, however, declined by 2% QoQ, led by a fall in demand deposits.Reported CASA mix, thus, declined 140bp QoQ to 49% (46% on average basis)

Adjusted for divergences, slippages continue to stay elevated: Q3FY18 slippages were up 8.8% qoq compared to Q2FY18 slippages (adjusted for the Rs48.7bn divergence component). However, the higher slippages did not reduce the stressed assets pool', which comprises BB and below rated' assets (Rs161bn, +2% qoq). The NPL conversion rate from this pool has continued the pace of ~Rs25bn/quarter and the management has remained guarded in identifying a timeline for its slowdown. Recoveries & upgrades driven by 2 major accounts: AXSB recovered/upgraded Rs40.1bn NPLs, of which, up to Rs22.7bn were contributed by the divergent Steel and...

Axis Bank Ltd. (AxisB) Q2FY18 numbers came below our estimation with net profit plummeting 67% QoQ to Rs4,323.8 mn due to high provisioning and weak NII growth. The bank reported higher slippage of Rs89.4 bn and profitability declined due to high credit cost, however it reported strong growth in credit portfolio driven by healthy traction in retail advances. AxisB has approved its capital raising plan amounting to Rs116.3 bn which will help it to absorb credit costs and also...

Event: Axis Bank's (AXSB) board has approved a capital raising plan amounting to USD1.79b (INR116.26b) to provide the necessary growth capital to the bank and support asset quality clean-up. Of the approved amount, USD1.4b (INR90.63b) is proposed to be raised via preferential issue of equity shares at INR525/share, while the remaining USD396.1m (INR25.63b) would be raised via warrants, which can be converted into equity shares at INR565/share. Investing entities: Bain Capital will invest USD1.06b (INR68.54b) USD710m (INR45.94b) would be in the form of equity and the balance USD349.3m...

ICICI Securities Ltd | Retail Equity Research The board of Axis Bank has approved raising of capital via preferential allotment of shares and warrants to select entities. About | 11626 crore is proposed to be raised, of which | 9063 would be via preferential allotment at a price of | 525 per share and balance | 2563 crore via warrants at a price of | 565 per share. Bain Capital which had earlier evinced interest in acquiring stake in the bank is getting ~4.8% shares....