Axis Bank Ltd., incorporated in the year 1993, is a banking company (having a market cap of Rs 250008.26 Crore).
Axis Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 20285.41 Crore, down -3.53 % from last quarter Total Income of Rs 21028.45 Crore and up 4.23 % from last year same quarter Total Income of Rs 19461.77 Crore. The bank reported net profit after tax of Rs 2356.91 Crore in latest quarter.
Investment Rationale
Axis Bank’s (Axis) Q2FY22 earnings surprised positively on portfolio quality 1) despite elevated slippage (3.5% vs 4% in FY21) recoveries, upgrades pulled GNPAs down 32bps QoQ to 3.53%; 2) restructuring at mere 0.64%; and 3) credit cost contained at 1.4% reinforces adequacy of existing buffer. However, this was offset by 1) growth momentum (1% QoQ/10% YoY) lagging peers; 2) portfolio mix shift weighing further on NIMs (down 7bps QoQ to 3.39%); 3) operating cost being elevated with 36% YoY/17% QoQ growth. Moderating credit cost trend is encouraging and now growth acceleration coupled with NIM improvement would be critical triggers to deliver superior RoEs. The brokerage expects earnings CAGR of >58% over FY21-FY23E and RoE of >14% by FY23E. It maintains BUY with a revised target price of Rs992 (earlier Rs942) assigning 2.4x FY23 book. Key risks: 1) Lower-than-anticipated growth can cap RoE improvement; 2) elevated opex.
Promoter/FII Holdings
Promoters held 11.64 per cent stake in the company as of 30-Sep-2021, while FIIs owned 54.53 per cent, DIIs 22.17 per cent.
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