Axis Bank has target of Rs 1645: Prabhudas Lilladher

Axis Bank has target of Rs 1645, says Abhijeet Mazumdar, Prabhudas Lilladher.

Mazumdar told CNBC-TV18, "In Axis Bank we were expecting the margins to contract but I think for the market as a whole the contraction in margin is much more than expected, largely because we did not expect such a strong balance sheet growth in the fourth quarter. Apart from the cost going up, the balance sheet expansion also need to mobilize higher term deposit so that has also impacted margins which are more than expected. So that getting realigned people had expected decline in margin but not to the quantum reported, so that is where the correction mainly because of that."
He further added, "We have a target price of Rs 1645. We have an accumulated trading on the stock. Axis bank has never been guiding for very high margins. They have been saying that it has been around 3.25 to 3.50. There were at around 3.8 largely because they had increased the rates mainly in the third quarter where the cost were not and they did not mobilize the balance sheet in the third quarter. That completely changed in the fourth quarter where they have not even increased the rates in the home loan and base rates came in January and February and because of their higher to some extent infrastructure exposure than the recent days the pass on the loan book is slightly lower than more working capital intensive balance sheet of Yes Bank and HDFCs.