Anand Rathi's research report on Axis Bank
Axis Bank Limited reported a net interest income growth of 8% in its Q2-FY22 standalone results at Rs.79,000 million as against Rs.73,260 million in Q2-FY21, driven by advances growth of 10% and a net interest margin of 3.39%. Non-interest income (comprising of fee, trading profit and miscellaneous income) for Q2-FY22 stood at Rs.32,310 million, growth of 17% YoY. Operating profit for Q2-FY22 stood at Rs.59,280 million, down by 11% YOY. Core operating profit for Q2-FY22 stood at Rs.54,560 million, down by 7% YOY. The Bank reported standalone profit of Rs.31,330 million, as compared to profit of Rs.16,830 million in Q2-FY21. The Bank’s advances grew 10% YOY to Rs.6,217,190 million as on 30th September 2021. Retail loans grew 16% YOY to Rs.3,456,030 million and accounted for 56% of the net advances of the Bank. The share of secured retail loans was ~ 80%, with home loans comprising 37% of the retail book. Corporate loan book grew by 1% YoY. 86% of Corporate book is now rated A- and above with 93% of incremental sanctions in Q2-FY22 being to corporates rated A- and above.
Outlook
Given the healthy asset mix, liability strength, adequate capital and superior customer profile, we believe the bank is poised to face near term challenges and benefit in the phase of normalisation. We continue to remain positive on the company and maintain our BUY rating on the stock with a target price of Rs.860 per share.
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