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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight22032012.pdf
AXIS BANK
PRICE: RS.1229 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.1230 FY13E P/E: 10.6X, P/ABV: 2.0X
Stock is trading near its fair value; hence, we are downgrading the stock on back of limited upside left from the
current level.
q Axis bank has moved up sharply during CY12 (49.3% YTD), as against
11.6% rise in SENSEX and 29.0% rise in BANKEX, on back of street's expectation of RBI moving to the downward interest rate trajectory along
with some positive noises coming from the government to address the
infrastructure related bottlenecks.
q We maintain the loan growth assumption at 18-19% during FY12/13;
however, we are modeling strong loan growth (~14% QoQ) during
Q4FY12 to meet PSL requirement (YTD loan growth at 4.4% as on
Q3FY12). We believe this could adversely impact the NIM as well as CAR.
q We expect NIM for FY12 to come near the upper-band of management
guidance (3.25-3.5%); however, it is likely to decline sequentially from
3.75% during Q3FY12 to ~3.4% during Q4FY12 on back of recent spike in
short-term wholesale deposit rates (bulk deposit share stands at 37.1% at
the end of Q3FY12) along with built up in low yielding PSL book.
q Although asset quality remained healthy till Q3FY12, perceived risk has
amplified with high exposure to infrastructure and other stressed sectors; key things to watch would be restructuring of infra book.
q At the current market price of Rs.1229, the stock is trading at 10.6x its
FY13E earnings and 2.0x its FY13E ABV. Stock is trading near its fair
value; hence, we are downgrading the stock to ACCUMULATE from BUY
earlier on back of limited upside left from the current level. We maintain
our TP at Rs.1230 based on P/ABV of 2.0x its FY13E adjusted book value
and advise our clients to look for better entry opportunity in the stock.
Stock has moved up sharply during CY12 (49.3% YTD); downgrade to ACCUMULATE with limited appreciation left from the
current level.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight22032012.pdf
AXIS BANK
PRICE: RS.1229 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.1230 FY13E P/E: 10.6X, P/ABV: 2.0X
Stock is trading near its fair value; hence, we are downgrading the stock on back of limited upside left from the
current level.
q Axis bank has moved up sharply during CY12 (49.3% YTD), as against
11.6% rise in SENSEX and 29.0% rise in BANKEX, on back of street's expectation of RBI moving to the downward interest rate trajectory along
with some positive noises coming from the government to address the
infrastructure related bottlenecks.
q We maintain the loan growth assumption at 18-19% during FY12/13;
however, we are modeling strong loan growth (~14% QoQ) during
Q4FY12 to meet PSL requirement (YTD loan growth at 4.4% as on
Q3FY12). We believe this could adversely impact the NIM as well as CAR.
q We expect NIM for FY12 to come near the upper-band of management
guidance (3.25-3.5%); however, it is likely to decline sequentially from
3.75% during Q3FY12 to ~3.4% during Q4FY12 on back of recent spike in
short-term wholesale deposit rates (bulk deposit share stands at 37.1% at
the end of Q3FY12) along with built up in low yielding PSL book.
q Although asset quality remained healthy till Q3FY12, perceived risk has
amplified with high exposure to infrastructure and other stressed sectors; key things to watch would be restructuring of infra book.
q At the current market price of Rs.1229, the stock is trading at 10.6x its
FY13E earnings and 2.0x its FY13E ABV. Stock is trading near its fair
value; hence, we are downgrading the stock to ACCUMULATE from BUY
earlier on back of limited upside left from the current level. We maintain
our TP at Rs.1230 based on P/ABV of 2.0x its FY13E adjusted book value
and advise our clients to look for better entry opportunity in the stock.
Stock has moved up sharply during CY12 (49.3% YTD); downgrade to ACCUMULATE with limited appreciation left from the
current level.
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