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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.


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At 13:40 hrs Axis Bank was quoting at Rs 756.95, up Rs 6.75, or 0.90 percent.


It has touched an intraday high of Rs 763.90 and an intraday low of Rs 751.40.


It was trading with volumes of 344,250 shares, compared to its thirty day average of 330,327 shares, an increase of 4.21 percent.


In the previous trading session, the share closed up 1.72 percent or Rs 12.65 at Rs 750.20.


The share touched its 52-week high Rs 866.60 and 52-week low Rs 626.40 on 25 October, 2021 and 12 April, 2021, respectively.


Currently, it is trading 12.65 percent below its 52-week high and 20.84 percent above its 52-week low.


Market capitalisation stands at Rs 232,364.56 crore.


For all recommendations report, click here


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first published: Mar 31, 2022 02:18 pm
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