MACQUARIE ON AXIS BANK
Neutral, target `501
Big miss on earnings due to high provisions
Slippages at all time high of 5.9%, driven by slippages from watchlist accounts
Recovery environment continues to be challenging
Credit costs guidance of 125-150bps for FY17E; looks ambitious
Margin guidance - above 3.6%
Loan growth healthy, deposit growth lags
IDFC ON AXIS BANK
Neutral, target `470
Disappointing quarter, slippages have peaked
One time provision on SDRs/Punjab govt depressed profits
Mgmt maintained its guidance on slippage and credit cost for FY17
60% of watch list will slip over 2 years with front ending in 1HFY17
Forecast GNPA of 3.39% for FY17
Religare Downgrades Axis Bank - AXSB’s Q1 PAT declined by 21% YoY to Rs 15.6bn, below RCMLe. Asset quality deteriorated sharply with absolute GNPAs/NNPAs rising by ~60% QoQ driving GNPA/NNPA ratio higher to 2.5%/1.1%. Non-interest income grew by 19% YoY largely on the back of higher treasury gains of Rs 9.1bn (Rs 6.5bn in Q1FY16). Fee income grew by 11% YoY. Operating cost / total income stood at 38.4%.
Neutral, target `501
Big miss on earnings due to high provisions
Slippages at all time high of 5.9%, driven by slippages from watchlist accounts
Recovery environment continues to be challenging
Credit costs guidance of 125-150bps for FY17E; looks ambitious
Margin guidance - above 3.6%
Loan growth healthy, deposit growth lags
IDFC ON AXIS BANK
Neutral, target `470
Disappointing quarter, slippages have peaked
One time provision on SDRs/Punjab govt depressed profits
Mgmt maintained its guidance on slippage and credit cost for FY17
60% of watch list will slip over 2 years with front ending in 1HFY17
Forecast GNPA of 3.39% for FY17
Religare Downgrades Axis Bank - AXSB’s Q1 PAT declined by 21% YoY to Rs 15.6bn, below RCMLe. Asset quality deteriorated sharply with absolute GNPAs/NNPAs rising by ~60% QoQ driving GNPA/NNPA ratio higher to 2.5%/1.1%. Non-interest income grew by 19% YoY largely on the back of higher treasury gains of Rs 9.1bn (Rs 6.5bn in Q1FY16). Fee income grew by 11% YoY. Operating cost / total income stood at 38.4%.
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