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Buy Axis Bank, says VK Sharma
VK Sharma of Anagram Stock Broking is of the view that Axis Bank is a decent buy. It is a better bank. It is one of the best banks as far as the NPAs are concerned. It’s CASA of 38%, which is relatively speaking better than other banks. So when you have more number of savings vis-à-vis the deposits, you are margins are still better.
VK Sharma of Anagram Stock Broking is of the view that Axis Bank is a decent buy.
Sharma told CNBC-TV18, "Axis Bank is a better bank. Let's look at the NPAs (Non Performing Asset) that this bank has at 0.4%, it is one of the best bank as far as the NPAs are concerned. The provision coverage ratio is not so great at around 57%. But what works for the bank is the high CASA (Current Account and Saving Account) of 38% which is relatively speaking better than other banks. So when you have more number of savings vis-à-vis the deposits, you are margins are still better and in terms of the net interest margins, 3.12% is a decent margin and even the net interest income which grew by 24% last quarter on year on year basis and 2% on quarter on quarter basis is something which other banks cannot boost about."
He further added, "The only thing going wrong for the bank is after ICICI Bank it's one of the highest exposures to the real estate sector. So there the low provisioning and the fact that 25% is already exposed to the sector, so the NPAs could rise going forward. But those could be maintained by the kind of growth that it has in terms of net interest income. So all put together it's a decent buy and one can remain invested in the stock."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.
