Axis Bank - Q2FY21 Result - Angel Broking

Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd

Axis Bank reported above estimate numbers for Q2FY21, CASA, NII & NIM improved however, weak Loan growth and increase in watch list are a concern. Loan Book grew 10.5% YoY and NII grew at 20% YoY. Pre Provisioning profit increased by 16% led by healthy growth in NII and controlled opex. Provision jumped 30% YoY.

On the liability front, SA deposits grew 12% YoY and helped by strong CA growth of 27% YoY, CASA ratio improved 320bps to 44.2% sequentially.

NNPL% remained low at 1%, 30+ overdue loan was contained at 2.3% and collection efficiency improved to 94/95% in Sep-Oct-20. BB& Below book and potential restructuring from wholesale loan book is 8.6% which is 3.1% of the overall book. Management expects Rs.2500cr worth of loan book gets restructured from a retail book. Bank carries contingent provision of Rs.10,800cr

Axis Bank core banking business trading at 1.4x of FY22E Book value. Which we believe is reasonable considering the improvement in core profitability and healthy capital to grow loan book.

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

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