Axis Bank - Slower pace of growth enable consolidation of NIMs:: LKP

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Key Highlights

·         Growth to slow down to 27% CAGR over FY11-13E

·         NIMs feel the pressure. We expect FY12 NIMs at 3.5% and FY13 at 3.6%

·         Asset quality remains manageable

We continue with a BUY rating on the stock

We continue to believe in the long term story of the bank upheld by a strong liability franchise, high growth and return profile and healthy asset quality. We maintain our BUY rating on the stock. We have moved to FY13E ABV.  The stock trades at 2.6x and 2.1x P/ABV FY12E and FY13E. We maintain our 2.5x P/ABV multiple and recommend a BUY with a target price of Rs.1,629 per share.