Views on Axis Bank Ltd 1QFY2017 Results: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity Research Analyst- Banking, Angel Broking) on Axis Bank Ltd 1QFY2017 Results:

"Axis Bank's results were expected to be under pressure during the quarter; however the reported PAT of INR 1556 cr is much below our expectations, largely due to sharp rise in provisioning. However, it was a known fact that the bank already carries a watch list of ~INR 22,600 cr worth of loans, of which ~60% was expected to fall into NPA over the next eight quarters. Accordingly ~10% of the watch list has fallen into NPA category, with total slippages of INR 3,638 cr during the quarter. We believe slippages will remain elevated in Q2FY17 as well and provisions to be high.

While the asset quality seems to have deteriorated, the management has reiterated it stand that the maximum credit cost for FY17 would be 150 bps and this comes as a mild relief. While the bank looks confident we believe the macro situation might result in little more stress on the book in the near term. On a positive side business growth remain decent with 21% growth in loans. We believe the near term challenges of bank will keep the stock range bound and hence we have a NEUTRAL rating on the stock."

Shares of AXIS BANK LTD. was last trading in BSE at Rs.546.05 as compared to the previous close of Rs. 543.3. The total number of shares traded during the day was 800506 in over 5897 trades.

The stock hit an intraday high of Rs. 551.45 and intraday low of 543.15. The net turnover during the day was Rs. 437545358.

Source : Equity Bulls

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