Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Maintain BUY on Axis Bank - Provision buffers strengthened (further) - HDFC Securities

Posted On: 2020-10-29 05:49:03


Mr. Darpin Shah, Institutional Research Analyst, HDFC Securities

We maintain BUY on AXSB with a target price of Rs 616. AXSB saw strong operating profit growth, led by robust NII growth, a sequential rebound in core fees, and controlled operating costs. Even as we expect the bank to register a rise in GNPAs in FY21E, it has already built significant provision buffers, which will limit the need for incremental provisioning. Further, strength on the funding side (CRAR and deposit traction) will allow the bank to capture resurgent credit growth.

Asset quality trends: Reported GNPAs declined 85/54bps to 4.2%. Adjusted for the impact of the SC order, GNPAs were 4.3%. Overall collection efficiency improved to ~95% in Sept-20 and further to ~97% in Oct-20. The pool of BB and below-rated loans grew ~37% QoQ to constitute ~2.6% of loans, led by voluntary downgrades. The management expects to restructure ~1.6% of loans. We continue to build in a rise in GNPAs in FY21E to 5.3%.

Non-tax provisions remained elevated at Rs 45.8bn (+30.2/3.7%). In addition to specific provisions covering ~88% of GNPAs, AXSB held provisions of ~Rs 108bn (1.9%) including contingent provisions, provisions against anticipated restructuring (Rs 18.6bn), and COVID-19 related provisions of Rs 50.1bn. Together, these constitute a significant buffer to absorb future stress. Nevertheless, we continue to model LLPs of 1.7% over FY21-23E.

Deposit growth was relatively tepid at 8.8/1.2%. However, the bank saw strong CASA growth at 17.0/9.4%. Consequently, the CASA ratio rose to 44.2% (+308/331bps). This partly contributed to a significant fall in the CoF (-125/-36bps) to 4.4%. Post the recent fundraise, CRAR stood at 19.4%.

Loan growth came in at 10.5/2.7%. Sequential growth was led by the SME segment (+6%, albeit -1% YoY), which in turn was led by disbursals under the credit guarantee scheme (Rs 60bn disbursed). At 11.9/2.4, the bank's retail portfolio witnessed broad-based growth while its corporate portfolio grew 12.4/2.2%. Funding side capabilities will allow the bank to capture resurgent growth. We model a 13% loan CAGR over FY21-23E.

Shares of AXIS BANK LTD. was last trading in BSE at Rs.493.7 as compared to the previous close of Rs. 504.85. The total number of shares traded during the day was 1562834 in over 32531 trades.

The stock hit an intraday high of Rs. 516.25 and intraday low of 489.5. The net turnover during the day was Rs. 783969327.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com



Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Rupee - Nov 24, 2020 - Reliance Securities

FMCG Sector Update - Recovery unlocked; lower growth divergence - HDFC Securities

Engineers India - Consultancy segment outperformance - ICICI Securities

Engineers India - Q2 FY21 Result Update - YES SECURITIES

Motherson Sumi Systems - Company Update - Virtual Investor Conference - ICICI Direct

Mutual Fund Review - November, 2020 - ICICI Direct

Sadbhav Engineering - Q2FY21 Company Update - ICICI Direct

IRB Infrastructure - Q2FY21 Company Update - ICICI Direct

Vodafone Idea fund raising - Angel Broking

Rupee - Nov 23, 2020 - Reliance Securities

Crude Oil - Nov 23, 2020 - Reliance Securities

Q2FY21 Bank Result Quick Review - Angel Broking

Banks & NBFC's Sector Update Report - Yet another watershed moment? - HDFC Securities

Galaxy Surfactants - EBITDA/kg has an upside risk - ICICI Securities

Diagnostics - COVID-19 tests continue to trend higher - ICICI Securities

Banking & Financial Services - Sector Update - Nov 22, 2020 - ICICI Direct

Dalmia Bharat Sugar - Q2FY21 Company Update - ICICI Direct

Balkrishna Industries - Industry export growth momentum continues - ICICI Securities

Covid Recovery Pulse - Festive positivity continues in auto retails, E-way bill generation improves... - ICICI Direct

Quant Pick - Exide Industries - ICICI Direct

Shankara Building Products - Q2FY21 Company Update - ICICI Direct

Triveni Engineering - Q2FY21 Company Update - ICICI Direct

Initiating Coverage on Sudarshan Chemical - Leaping into the league of giants - HDFC Securities

Earnings Wrap Q2FY21: Earnings outperform, post Covid recovery picks up steam - ICICI Direct

Vodafone Idea Positive development beneficial for IDFC first bank - Angel Broking

Lakshmi Vilas Bank - Angel Broking

WIPRO Buyback record date announcement - Angel Broking

TCS buyback record date announcement - Angel Broking

Banks Sector Update - Collection efficiency - a positive surprise! - HDFC Securities

Quant Pick - Max Financial Services - ICICI Direct

Graphite India - Q2FY21 Result Update - ICICI Direct

Gladiator Stocks - Maruti Suzuki India - ICICI Direct

Exide Industries - Q2FY21 Result Update - ICICI Direct

Mishra Dhatu Nigam - Execution outlook remains strong - ICICI Securities

Bharat Electronics - Diversifying into multiple revenue streams - ICICI Securities

Wipro Ltd - Virtual Analyst Meet Update - ICICI Direct

Avadh Sugar & Energy - November 2020 - Company Update - ICICI Direct

Mahindra Lifespace Developers - H1FY21 Company Update - ICICI Direct

Quant Pick - Godrej Consumer Products - ICICI Direct

India Equity Strategy Report - Quarterly flipbook - HDFC Securities

Maintain REDUCE on Jubilant FoodWorks - Recovery continues; priced-in - HDFC Securities

Maintain BUY on Ahluwalia Contracts - Q2FY21 - Significant beat on execution - HDFC Securities

Repco Home Finance Limited - Q2 FY21 Result Update - YES Securities

JK Lakshmi Cement - Target upgrade - Angel Broking

BUY on Petronet LNG - Stellar quarter - HDFC Securities

Maintain BUY on Prestige Estates Projects - Capex cycle to gather pace - HDFC Securities

REDUCE on LIC Housing Finance - Tread with caution - HDFC Securities

SELL on New India Assurance - High claims ratio dents profits - HDFC Securities

New orders for L&T - Angel Broking

Cipla - Multi-G agreement - Angel Broing



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019