Notice: Undefined index: secID in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 9

Warning: include_once(/newsCentre/captcha.php): failed to open stream: No such file or directory in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 25

Warning: include_once(): Failed opening '/newsCentre/captcha.php' for inclusion (include_path='.:/usr/share/php') in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 25

Notice: Undefined index: secID in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 49

Notice: Undefined variable: storySecID in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 57

Warning: count(): Parameter must be an array or an object that implements Countable in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 223

Warning: include_once(./functions/secwiseNewsFunctions.php): failed to open stream: No such file or directory in /me/beta.myiris.com/htdocs/newsCentre/bodyTop.php on line 5

Warning: include_once(): Failed opening './functions/secwiseNewsFunctions.php' for inclusion (include_path='.:/usr/share/php') in /me/beta.myiris.com/htdocs/newsCentre/bodyTop.php on line 5
Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
13 July, 2025 16:20 IST
Buy Axis Bank; target price of Rs 875: IDBI Capital
Source: IRIS | 27 Jul, 2021, 07.16PM
Rating: NAN / 5 stars.
Comments  |  Post Comment

Notice: Undefined variable: fileR in /me/beta.myiris.com/htdocs/newsCentre/bin/addLinksNew.php on line 17

Notice: Undefined variable: fileR in /me/beta.myiris.com/htdocs/newsCentre/bin/addLinksNew.php on line 142


Axis Bank's asset quality remain stable with GNPA at 3.85% versus 3.7% QoQ (as per IRAC norms) led by write offs (Rs.34 billion versus 55.5 billion QoQ); however, slippage ratio remain high (4.2% vs 3.4% QoQ). BB & below book grew by 3% QoQ and restructured assets stood at 0.3% of customer assets lower than its peers are key positives during the quarter.

PAT grew by 94% QoQ led by lower provisions (down 20% QoQ). NII grew by 11% YoY led by decline in NIMs at 3.46% (3.56% QoQ). PPoP grew by 10% YoY (down 6.5% QoQ) led by higher operating expenses (up 33% YoY).

Commenting on the result review, IDBI Capital said, "With management change behind, strong capital in place and focus on secured retail portfolio, AXISB would see better revival in growth within the sector. With improvement in credit growth and better credit quality, we revised slightly earning upwards (FY23E ABV up 1%). We have a 'BUY' rating with new TP of Rs. 875 (earlier Rs.810) valuing it at 2.1x (earlier 2.0x) P/ABV FY23 as valuation difference with its peer (ICICI bank) expected to decline."

Key highlights and investment rationale

Credit growth improved led by across the segments:
Credit growth improved to 12% YoY (9% YoY FY21) due to better growth across the segments. Retail portfolio growth improved to 14% YoY vs 10% FY21; corporate book grew by 8% YoY (1% QoQ). Retail disbursements for the quarter grew by 3.3X YoY. Retail book accounted for 54% of the net advances of the Bank. The corporate lending portfolio continues to shift towards better rated clients with 85% of corporate exposure now rated ‘A’ or better with 94% of incremental sanctions in Q1FY222 being to corporates rated A- and above. Deposits during the quarter grew by 16% YoY with CASA at 42% vs 42% QoQ. CASA+RTD now form 83% of deposits.

Asset quality stable; Restructured assets at 0.33%:  Asset quality remain satble with GNPA (as per IRAC norms) at 3.85% vs 3.7% QoQ; led by write offs (Rs.34 billion). Slippage ratio increased to 4.2% (annualized) vs 3.4% QoQ due to second covid-19 wave impact. PCR (excluding technical write offs) declined to 70% vs 72% QoQ. BB & below book increased by 3% QoQ and restructured assets stood at 0.3% of customer assets lower than its peers are key positives during the quarter. Bank has prudently built up a cumulative provision (standard + additional other than NPA) translate to 2.05% of standard loans, which provides a little comfort. On an aggregated basis (specific+ standard+ additional + Covid), coverage ratio stands at 118% of GNPA as of Q1FY22.

NIMs declined sequentially; Cost to income ratio inched up: NIMs declined by 10bps QoQ to 3.46% led by interest reversal and product mix. Higher employee expenses (up 32% YoY) resulted in increase in cost to income ratio to 43.5% (vs 39% YoY).

Outlook: Management has proactively written off the stress assets (no sale to ARC) impacted by Covid-19. Post near term stress taking shape, we expect the book to normalize and improve thereon. Bank has one of the better liability franchises with strong CASA ratio at ~40% which suffices well in current environment.    

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

 




 Post Comment
Notice: Undefined index: dir in /me/beta.myiris.com/htdocs/newsCentre/comments.php on line 162
>
Name Email
Comment
Security Code type   
Notice: Undefined variable: captchacode in /me/beta.myiris.com/htdocs/newsCentre/comments.php on line 183
into this box
Related Articles

Notice: Constant DOC_ROOT_FOR_HTML_FILES already defined in /me/beta.myiris.com/htdocs/newsCentre/rightSideTabs.php on line 1

Notice: Undefined index: secID in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 470

Notice: Undefined index: secID in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 470
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer


Warning: fopen(/me/beta.myiris.com/htdocs/newsCentre/news_web_count.txt): failed to open stream: Permission denied in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 566

Warning: fwrite() expects parameter 1 to be resource, boolean given in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 567

Warning: fclose() expects parameter 1 to be resource, boolean given in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 568

Notice: Undefined index: key in /me/beta.myiris.com/htdocs/newsCentre/storyShow.php on line 571