Axis Bank - March 2013 Results Preview - Motilal Oswal

- Loan and deposit growth is expected to be near industry average at 18%+ YoY and 17% YoY respectively.

- While 4Q is a weak quarter for NIMs historically as the bank builds PSL, lag impact of deposit re-pricing at lower rates and benefit of capital raised of INR55.4b would help it maintain stable NIMs QoQ.

- Fee income growth is expected to be healthy at ~20%+ YoY led by strong growth in retail fees. However, ex-retail, fee income growth is expected to remain moderate.

- Even though slippages and restructured loan portfolio are expected to rise, asset quality would remain manageable.

- We conservatively factor credit cost of ~1%, compared to 0.8% in 9MFY13.

- The stock trades at 1.6x FY14E and 1.4x FY15E BV, and 9.5x FY14E and 8x FY15E EPS. Maintain Buy.

Source : Equity Bulls

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