Visit http://indiaer.blogspot.com/ for complete detailsResult Review
Axis Bank
Axis Bank announced its 2QFY2011 results today. Net profit grew 38.3% yoy to `735cr,
marginally ahead of our estimate of `706cr, mainly on account of better-than-estimated
other income. Strong operating performance with stable asset quality was the key positive
from the results.
Advances increased by a moderate 1.8% sequentially (robust 36.5% yoy), while deposits
grew by a robust 35.7% yoy and 6.4% sequentially, well ahead of the industry’s growth
rate. Consequently, net interest income (NII) recorded 40.5% yoy and 6.7% sequential
growth. CASA ratio improved to 41.5% in 2QFY2011 from 40.2% in 1QFY2011. Reported
NIM at 3.68% registered a marginal decline of 3bp sequentially. Gross and net NPA ratios
of the bank were stable at 1.1% and 0.3%, respectively.
At the CMP, the stock is trading at 2.9x FY2012E ABV. We remain positive on the bank
and believe that it deserves premium valuations owing to its attractive CASA franchise,
multiple sources of sustainable fee income, strong growth outlook and A-list management.
We maintain an Accumulate recommendation on the stock with a Target Price of `1,704,
implying an upside of 9.0% from current levels.
No comments:
Post a Comment