ICICI Securities:
AXIS BANK:
Rating : Buy
Target : | 1633
Target Period : 12 months
Potential Upside : 18 %
Axis Bank reported a PAT of | 3388 crore (our estimate: | 3356 crore) on the back of robust business growth of 35% YoY.
Even though business grew a whopping 19% QoQ in Q4FY11 NII growth slackened to 17% YoY as NIM declined 37 bps QoQ to 3.4%.
However, the fee income jumped 58% YoY (accounting policy change in Q4FY11), which was a positive surprise, leading to PAT of | 1020 crore.
Advances grew 36% YoY to | 1,42,408 crore with priority sector lending picking up (the agri segment grew 61% QoQ) in Q4FY11.
Deposits grew 34% YoY to | 189238 crore with term deposits rising 48% YoY and CASA declining by 5.6% YoY to 41%. The bank, which had been growing rapidly, has reached a scale where it is comfortable with ~25% YoY business growth (still ahead of industry).
We expect 23% CAGR in business mix leading to a CAGR of 24% and 29% in NII and PAT, respectively, over FY11-13E.
Advances grew a strong 36% YoY to | 142408 crore while deposits grew 34% YoY to | 1,89,238 crore
Going forward, the bank expects a slowdown in business growth to ~25% YoY
Growth in advances in Q4FY11 was led by a thrust on priority sector lending with agri increasing by 50% YoY (61% QoQ) and SME increasing by 10% YoY (26% QoQ)
NIM contracted 37 bps QoQ from 3.8% to 3.4% in Q4FY11 as CASA declined by 1.2% QoQ to 41.1% and CoF inched up by 77 bps QoQ to 5.6% (average cost of term deposits inched up by 121 bps)
The management expects NIM to stabilise between 3.25% and 3.5%, going forward
Fee income grew a whopping 58% YoY to | 1231 crore in Q4FY11 with the large and mid-corporate credit segment growing 68%, treasury expanding 78% YoY and agri-SME expanding 45% YoY
Fee income, adjusted for change in accounting policy for bank guarantee commissions for Q4FY11, grew 39% YoY
The GNPA ratio at 1.01% (12 bps dip YoY) and NNPA ratio at 0.26% (10 bps dip YoY) with PCR strong at 91% is indicative of stable asset quality
The bank added | 108 crore to its restructured assets, taking the total outstanding to | 1930 crore (1.2% of gross customer assets)
The bank added 262 new branches and 967 ATMs in this quarter. However, the cost to income ratio was maintained QoQ at 42% in Q4FY11 on account of healthy total income growth. :clap: :thumb:
AXIS BANK:
Rating : Buy
Target : | 1633
Target Period : 12 months
Potential Upside : 18 %
Axis Bank reported a PAT of | 3388 crore (our estimate: | 3356 crore) on the back of robust business growth of 35% YoY.
Even though business grew a whopping 19% QoQ in Q4FY11 NII growth slackened to 17% YoY as NIM declined 37 bps QoQ to 3.4%.
However, the fee income jumped 58% YoY (accounting policy change in Q4FY11), which was a positive surprise, leading to PAT of | 1020 crore.
Advances grew 36% YoY to | 1,42,408 crore with priority sector lending picking up (the agri segment grew 61% QoQ) in Q4FY11.
Deposits grew 34% YoY to | 189238 crore with term deposits rising 48% YoY and CASA declining by 5.6% YoY to 41%. The bank, which had been growing rapidly, has reached a scale where it is comfortable with ~25% YoY business growth (still ahead of industry).
We expect 23% CAGR in business mix leading to a CAGR of 24% and 29% in NII and PAT, respectively, over FY11-13E.
Advances grew a strong 36% YoY to | 142408 crore while deposits grew 34% YoY to | 1,89,238 crore
Going forward, the bank expects a slowdown in business growth to ~25% YoY
Growth in advances in Q4FY11 was led by a thrust on priority sector lending with agri increasing by 50% YoY (61% QoQ) and SME increasing by 10% YoY (26% QoQ)
NIM contracted 37 bps QoQ from 3.8% to 3.4% in Q4FY11 as CASA declined by 1.2% QoQ to 41.1% and CoF inched up by 77 bps QoQ to 5.6% (average cost of term deposits inched up by 121 bps)
The management expects NIM to stabilise between 3.25% and 3.5%, going forward
Fee income grew a whopping 58% YoY to | 1231 crore in Q4FY11 with the large and mid-corporate credit segment growing 68%, treasury expanding 78% YoY and agri-SME expanding 45% YoY
Fee income, adjusted for change in accounting policy for bank guarantee commissions for Q4FY11, grew 39% YoY
The GNPA ratio at 1.01% (12 bps dip YoY) and NNPA ratio at 0.26% (10 bps dip YoY) with PCR strong at 91% is indicative of stable asset quality
The bank added | 108 crore to its restructured assets, taking the total outstanding to | 1930 crore (1.2% of gross customer assets)
The bank added 262 new branches and 967 ATMs in this quarter. However, the cost to income ratio was maintained QoQ at 42% in Q4FY11 on account of healthy total income growth. :clap: :thumb:
