Motilal Oswal - Axis Bank Limited (AXISBANK) MOSL: AXIS BANK (Buy)-Higher provisioning/DTA reversal drive losses, cutting estimates by 7%

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Motilal Oswal

Nitin Aggarwal

EUR 120.00 For Business Accounts Only

MOSL: AXIS BANK (Buy)-Higher provisioning/DTA reversal drive losses, cutting estimates by 7%

AXIS BANK: Higher provisioning/DTA reversal drive losses, cutting estimates by 7%

(AXSB IN, Mkt Cap USD28.3b, CMP INR713, TP INR825, 16% Upside, Buy)

AXSB reported a net loss of INR1.1b (our estimate: PAT of INR541m) due to a one-time DTA reversal of INR21.4b and elevated provisions. PBT increased 108% YoY to INR24.3b (our estimate: INR27.1b). For 1HFY20, PPoP grew 40% YoY to INR118.4b, while PAT declined 16% YoY to INR12.6b.
NII increased 17% YoY to INR61b (in-line) as the margin expanded ~10bp QoQ to 3.5%. Other income grew 45% YoY to INR38.9b, led by treasury gains of INR8.1b and strong traction in retail fee (+16% YoY).
Operating expenses were up 6% YoY, trailing total income growth. As a result, PPoP increased 45% YoY to INR59.5b (our estimate: INR54.9b).

23/10/2019 14 EN

Underlying

Axis Bank Limited

Axis Bank is a consumer and corporate bank engaged in operations in India. Co. maintains activities in both retail and corporate banking. Co. is also active as a mutual fund in the Indian capital market. Co., through its servicing and distribution network provides a complete range of services to its investors. As of March 31, 2011, Co. operated 1,390 branches and extension counters, as well as a network of approximately 6,270 ATMs. Co. also has branches in Singapore, Hong Kong, Shanghai, the UAE, and Sri Lanka. Co. provides services in consumer and corporate banking, NRIs, Retail loans, treasury services, Capital market services and Financial Advisory services.

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INE238A01034 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Nitin Aggarwal

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MOSL: AXIS BANK (Buy)-Higher provisioning/DTA reversal drive losses, cutting estimates by 7%

Int'l Macro Vision: Sector Synopsis

MOSL : AXIS BANK: Exemplary performance; margins take a giant leap

AXIS BANK with less fundamental stars is reduced to Neutral

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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