Hold Axis Bank - Sushil Finance

Axis Bank's core performance continues to remain strong on back of decent biz growth and decent NIMs. Despite asset quality risk persists in near term, the Bank has been able to manage its asset quality quite well. Considering strong Q4FY13 results, we have largely retained our FY14E estimates and rolled over to FY15E. We have improved our loan mix between retail and corporate as thrust on retail will continue, while corporate loan book to remain slower.

Going forward, we expect its Advance & Deposit to grow by 18.6% & 17.3% respectively in FY14E and 19.8% & 18.9% respectively in FY15E, while Net Profit to grow at 17% in FY14E & at 19% in FY15E. The focus on retail assets, higher than system growth outlook, better deposit franchise and better management of asset quality are key value drivers for the stock.

Axis Bank currently trades at an valuation of 1.6x FY15E ABV & 9.7x FY15E Earnings. We maintain "Hold" with an increased price target of Rs.1565.

Source : Equity Bulls

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