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Last Updated : Mar 22, 2019 03:35 PM IST | Source: Moneycontrol.com

Buy Axis Bank; target of Rs 825: ICICI Direct

ICICI Direct is bullish on Axis Bank has recommended buy rating on the stock with a target price of Rs 825 in its research report dated March 20, 2019.

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ICICI Direct's research report on Axis Bank


Axis Bank’s top management provided deep insights into the bank’s strategy to achieve aspired RoE of 18% in the medium term (FY22E). New MD & CEO, Amitabh Chaudhary, showcased their Growth- Profitability- Sustainability (G-P-S) strategy. Drivers to lead to uptick in RoE are; 1) Risk normalisation (controlled asset quality and credit cost), 2) business mix optimisation (RAROC based portfolio choice), 3) operating efficiency (cost to asset ratio to trim below 2%). Our RoE estimates, without factoring in capital infusion, are at ~15.4% in FY21E. Hence, RoE target of 18% by FY22E, along with capital infusion, seems a bit difficult.


Outlook


We remain positive on the bank and upgrade our target price to Rs 825 (earlier Rs 790) valuing core bank at 2.6x FY21E ABV. We maintain BUY rating.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.




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First Published on Mar 22, 2019 03:35 pm
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