Comments
Centrum Broking
Axis Bank (Buy)
Target: ₹825
CMP: ₹731.75
Axis Bank’s earnings were mixed. NII/loan growth were in line while NIM was a tad below. NIM may enhance as RIDF loans decline and higher yielding retail and CASA share rise. Opex was a miss, led by higher staff cost. Net slippages were a miss at ₹40 billion (₹3,120 crore) of which retail were ₹374 crore (mainly mortgages). As per the bank, stress build-up is transitory and recoveries may gather pace from Q3FY22. Mortgage slippages should not be worrisome since LTV is comfortable. Restructured pool rose q-o-q from 30bps to 36bps. Buffer provisions at ₹5,000 crore or 81 bps and CET-1 at 15.4 per cent give added cushion. There is no material change in FY22/23E PAT and we would lower provisions on more visibility on recoveries, a key monitorable. Buffer provisions and healthy CET-1 provide balance sheet strength that could aid growth. We maintain multiple at 2.2x FY23ABV also keeping our target price unchanged at ₹825. Risks: higher stress.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.