Motilal Oswal's research report on Axis Bank
Axis Bank (AXSB) reported a strong quarter, with PAT above our estimates, aided by lower provisions. Business growth was strong across segments, with retail disbursements at an all-time high. - On the asset quality front, the slippage trend subsided sequentially (INR52.8b v/s INR67.4b in 3Q) and total restructuring stood at 0.3% of loans. Also, the total funded and non-funded book declined to 2.0% of loans (v/s 2.4% in 3QFY21). Also, AXSB has ~72% coverage on GNPL and additionally holds a provision buffer of 2% (including standard provisions) to protect the balance sheet against any potential stress. However, the resurgence of COVID and state-wise lockdown would be a key monitorable in the near term. We increase our FY22/FY23E earnings by 12%/6% and estimate AXSB to deliver RoA/RoE of 1.7%/16.4% in FY23. Maintain Buy.
Outlook
We increase our FY22/FY23E earnings by 12%/6% and estimate AXSB to deliver RoA/RoE of 1.7%/16.4% in FY23. Maintain Buy, with revised TP of INR925 (2.0x FY23E ABV).
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