Axis Bank - 3QFY2013 Result Preview - Angel Broking

Axis Bank (CMP: Rs.1,387 / TP: Rs.1,594 / Upside: 15.0%)

Axis Bank is slated to announce its 3QFY2013 results today. We expect the bank to report a healthy NII growth of 15.2% yoy to Rs.2,466cr. Non-interest income too is expected to increase at a healthy pace of 16.8% yoy to Rs.1,669cr. Aided by healthy growth in operating income, the pre-provision profit of the bank is expected to register a growth of 15.8% yoy. However, provisioning burden is expected to decline by 2.9% yoy, leading to net profit growth of 21.0% yoy to Rs.1,334cr.

The stock is currently trading at 1.9x FY2014E ABV - more than 50% discount to HDFC Bank vs an average discount of 35% over the past five years (which we believe over-discounts asset quality concerns). We remain positive on the bank, owing to its attractive CASA franchise, multiple sources of sustainable fee income and reasonable growth outlook.

Hence, we maintain our Buy recommendation on the stock with a target price of Rs.1,594.

Source : Equity Bulls

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