JM Financial recommended hold rating on Axis Bank with a target price of Rs 590 in its research report dated April 26, 2018.
JM Financial's research report on Axis Bank
Axis Bank accelerated the recognition of stressed assets in 4QFY18 driven by RBI’s revised stressed asset guidelines. Consequently, slippages jumped to ~Rs163bn (slippage ratio of 4.2%, NOT annualized). Net Non-NPL stress pool of the bank thus reduced sharply to 2.7% of loans, as against 4.5% in 3QFY18. We see this as a positive move despite the near-term negative impact on P&L (loss of INR 21.9bn in 4QFY18).
Outlook
Axis Bank has the right capital adequacy to still pursue growth opportunities while provisioning rate persists at high levels near-term. Our target price of INR 590 on the stock values the bank at 2.1x FY20E full adjusted book value. Maintain HOLD.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.