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Showing posts from October, 2010

Axis Bank

Result Update: Axis Bank.

Axis bank reported strong growth in its net interest income (40.5%) buoyed by strong growth in its loan book (36.5% YoY; however, muted growth of 1.8% QoQ) along with 16 bps YoY improvement in margins. Its net profit grew 38.3% on back of robust growth in its core business and moderate growth in provisions & contingencies.

Non-interest income declined marginally to Rs.10.33 bn during Q2FY11 (decline of 3.0% YoY) on back of lower trading profit (decline of 51.6%). During the same period, fee income grew moderately at 18.0% YoY; however, it lagged overall business growth.It continued to display superior liability franchise which is visible in terms of its CASA mix (41.5% at the end of Q2FY11). Its NIM improved (16 bps YoY) on back of lower cost of funds (decline of 66 bps YoY) which is underpinned by strong CASA mobilization.

Long term investors can accumulate on declines only, with a target price of Rs.1825 based on P/ABV of 3.4x its FY12E adjusted book va…