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Buy Axis Bank; target of Rs 975: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Axis Bank has recommended buy rating on the stock with a target price of Rs 975 in its research report dated March 31, 2022.

March 31, 2022 / 01:28 PM IST

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

 
 
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Prabhudas Lilladher's research report on Axis Bank

The much awaited Axis-Citi deal was announced yesterday, wherein Axis will acquire Citibank’s self-funded consumer businesses for Rs123bn. Deposits/assets to be purchased will be Rs502bn/274bn with credit card portfolio of Rs89bn. Rationale for the deal is (i) building a premium base of customers and increasing granularity (ii) Citi’s portfolio complementing that of Axis, as both entities have different customer profile and (iii) good cross sell opportunities for Axis which would eventually lead to synergies. In our view, the deal is positive for Axis Bank in medium term, however the key is customer retention. With systemic asset quality risk receding and credit growth prospects improving, Axis could be one of the main beneficiaries.


Outlook

We raise the multiple/TP to 2.3x/Rs975 as we roll forward to FY24E ABV. Upgrade to ‘BUY’ from Accumulate.