Hold Axis Bank - Result Update - Emkay

Reco: HOLD Axis Bank
CMP: Rs 1,008
Target Price: Rs 1,380

Strong results; Asset quality comfortable

Axis Bank (AXSB) Q3FY12 NII inline with estimates. However aided by strong fee/ trading income, net profit at Rs11.0bn was ahead of expectation

Strong advance growth of 6.2%qoq and stable NIM's at 3.75% drive growth in NII. CASA saw marginal decline led by cannibalization of deposits, as reflected in lower SD growth

Asset quality held up well with GNPA/NNPA ratio broadly stable at 1.1%/ 0.4%. Slippages came in @ Rs5.4bn. Problem loans (GNPA + restructured) form mere 3% of loans

With slippages coming under control we believe that AXSB could trade at its historic average valuations at 2.3x 1-year forward. Maintain HOLD with TP of Rs1,380.

Source : Equity Bulls

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