Moneycontrol

Budget 2023Budget 2023

PARTNERS

  • Tata AIA Life Insurance
  • Hafele
  • Motilal Oswal
  • SMC Global Securities Limited
  • SBI Life
  • DSP Mutual Fund
Upcoming Event : LeapToUnicorn - mentoring, networking and fundraising for startups. Register now

Axis Bank tanks 7% on asset quality; analysts still bullish

Barclays retains overweight on the stock but reduced target price to Rs 629 from Rs 633 per share. It has also cut FY16/17 earnings per share by 4 and 3 percent respectively on back of increased credit costs.

October 28, 2015 / 03:16 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Moneycontrol Bureau

Shares of Axis Bank tanked over 7 percent intraday Wednesday on rising concerns over ist asset quality. The private lender’s stressed assets were significantly higher in September quarter.

Slippages (excluding sale to asset restructuration company) declined sequentially to Rs 590 crore versus Rs 1190 crore. However, during the quarter, the bank sold Rs 1820 crore of loans to ARC for net consideration of Rs 650 crore. Loss on sale has been absorbed in Q2 using Rs 850 crore of contingency provisions and Rs 340 crore additional NPA provisions. The company has maintained guidance of stressed asset addition of Rs 5700-6000 crore and 90 basis points credit cost guidance for FY16.

However, analysts are not worried about the bank’s asset quality and remain bullish. Barclays retains overweight on the stock but reduced target price to Rs 629 from Rs 633 per share. It has also cut FY16/17 earnings per share by 4 and 3 percent respectively on back of increased credit costs. It feels one of few reasons for overweight rating as Axis remains well captialised though lumpy credit events remain a risk and stress sector exposure is substantial.