On a cusp of turnaround… Axis Bank is the third largest private sector bank in India. The Bank has a large footprint of 3,779 domestic branches (including extension counters) and 12,834 ATMs spread across the country.
Valuation: We believe that the bank is approaching the end of recognition of stressed loan cycle. With an improving outlook on fresh slippages and credit cost, we expect the bank to clock RoA of 1.2% and RoE of 14% by FY20E. Further, Axis Bank has fundamental strengths such as high CASA ratio, distribution network and high and growing share of retail loans. Thus, we maintain ‘BUY’ rating on the stock with a revised upward target price (TP) of Rs 637. (P/ABV of 2.4x for FY20E). Key thing to watch out will be an appointment outside Axis Bank as MD & CEO which can lead to some disruption/slowdown before stability.
Investments in equity shares, debentures, etc., are not obligations of, or guaranteed by Wealth India Financial Services Pvt. Ltd., and are subject to investment risks. Click here to read our full disclaimer.
Other articles you may like
- Change in “Franklin India Index Fund – NSE Nifty Plan” Scheme Name
- Discontinuation of SIP with Insurance
- Resumption of subscription to units of Designated Schemes of DSP Mutual Fund
- Temporary Suspension on Overseas Mutual Funds Withdrawn
- Can Past Performance Help You Build The Best Equity Fund Portfolio For The Future?