Accumulate Axis Bank; target of Rs 725: Prabhudas Lilladher
Prabhudas Lilladher recommended accumulate rating on Axis Bank with a target price of Rs 725 in its research report dated January 28, 2021.
February 04, 2021 / 06:53 PM IST
Prabhudas Lilladher's research report on Axis Bank
Axis Bank earnings of Rs11.2bn (PLe:20.7bn) was lower than estimates mainly on back of higher provisions & miss on PPOP which was due to marginally lower NII and high opex. Pro-forma slippages of Rs67.4bn (84% retail) looked under control, while restructuring book of Rs27.1bn (45bps of loans) was on lower side. Only negative was high provisions despite carrying additional Rs112bn of provisions and also higher write-off in the quarter. High provisioning levels (75% PCR & 208bps of addl provisions) should act as strong cushion for P&L hits as we watch slippages trends ahead with restructuring more or less done for the bank. Operationally, fees need to pick up, improve back loan growth and tight opex control will keep PPOP strong.
We retain at ACCUMULATE with revised TP of Rs725 (from Rs750) based on 1.9x Mar-23 as we marginally cut NII growth, increase opex & increase w.offs
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