KR Choksey is bullish on Axis Bank has recommended buy rating on the stock with a target price of Rs 936 in its research report dated October 28, 2021.
Broker Research
November 02, 2021 / 04:16 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.
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KR Choksey’s research report on Axis Bank
The Bank’s Net Interest Income (NII) grew 8% YoY to INR 7,900 Cr from INR 7,326 Cr in Q2FY21. Net interest margin (NIM) for Q2FY22 stood at 3.39%. The Bank’s operating profit for the quarter was INR 5,928 Cr while the core operating profit was INR 5,456 Cr. Net profit grew 86% from INR 1,683 Cr in Q2FY21 to INR 3,133 Cr in Q2FY22. The total deposits grew by 18% YOY, both on period end basis and quarterly average balance (QAB) basis. The Bank’s advances grew 10% YoY to INR 6,21,719 Cr as on 30th September 2021. As on 30th September 2021, the Bank’s reported Gross NPA and Net NPA levels were 3.53% and 1.08% respectively as against 3.85% and 1.20% as on 30th June 2021. Overall capital adequacy ratio (CAR) including profit for H1FY22 stood at 20.04% with CET 1 ratio of 15.81%.
Outlook
We have factored in a CAGR of 14.0% in advances, 14.7% in NII, 12.9% in PPOP, and 45.1% in PAT driven by healthy financial metrics on all fronts over FY21-24E. We revise our target price to INR 936 per share (earlier INR 807 per share), applying a P/ABV multiple of 2x to its FY24E adj. Book Value. The revision is based on roll forward from FY23E Adj BVPS to FY24E adj. BVPS. As a result, we upgrade our rating on the share of AXSB to “BUY” (previously HOLD).
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