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Buy Axis Bank; target of Rs 942: Arihant Capital

Arihant Capital is bullish on Axis Bank has recommended buy rating on the stock with a target price of Rs 942 in its research report dated March 31, 2022.

March 31, 2022 / 02:18 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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Arihant Capital's research report on Axis Bank

Axis Bank has signed a definitive agreement to acquire CitiBank’s (India) consumer business Indian consumer business for a cash consideration of $1.6 bn (INR 12,325 cr). The transaction is expected to be close in the next 9-12 months (by Q4FY23), subject to requisite regulatory approvals. The Full transition expected by Sep’24 with transfer of all customers, products, data and partner connections to Axis Bank’ s systems. The transaction includes the sale of the consumer banking businesses of Citibank India, which includes credit cards, wealth management, retail customer accounts and consumer loans. It also includes the sale of the consumer business of Citi’s NBFC, Citicorp Finance (India) Ltd, comprising the asset-backed financing business. The transaction will also include transfer of 3,600 Citi employees supporting the consumer businesses to Axis Bank.

Outlook

However, integration of Citi’s business, portfolio behavior and synergies in terms of cost savings and RoA accretion will be a key monitorable. We revise our rating on the stock to Buy from Accumulate with a TP of INR 942 (unchanged), based on 2.1x FY24E P/ABV.