EUR 120.00 For Business Accounts Only

MOSL: Morning India (23/January/20): 1. Axis Bank (Mixed quarter; watch-list reaches normalized levels); 2. Larsen & Toubro; 3. Asian Paints; 4. Havells India; 5. Cipla; 6. Zee Entertainment; 7. AU Small Finan

Morning India (23/January/20):

Today’s top research idea
Axis Bank: Mixed quarter; watch-list reaches normalized levels
** AXSB reported an in-line operating performance, but slippages stood elevated with BB and below pool driving 81% of total corporate slippages. Outstanding BB and below pool declined 18% QoQ to INR51.3b while non-funded exposure to BB & below pool increased to INR36.7b on account of one downgrade in the telecom sector.

** AXSB reported PAT of INR17.6b (+4.5% YoY). NII increased 15% YoY to INR64.5b, led by healthy domestic loan growth (+18% YoY) and margin expansion of 6bp QoQ to 3.6%. Other income declined 5.4% YoY to INR37.9b owing to muted fee growth of 6% YoY.

** AXSB reported steady loan growth amidst economic slowdown, led by continued momentum in the retail business. However, the slippage trajectory remains elevated with BB & below pool driving most of the corporate slippages. We estimate near-term credit cost to stay elevated as AXSB shores up its coverage ratio before reaching normalized levels of 1.2% for FY22. We estimate AXSB to deliver RoA/RoE of 1.6%/16.6% in FY22. Maintain Buy. 

Piping hot news
Telcos to take a call on paying AGR dues today
Vodafone Idea Ltd, the worst hit by the top court’s order on telecom dues, will await the hearing of its modification plea seeking easier payment terms before clearing dues to the government.