Axis Bank - Q2FY14 Result First-Cut - Better than expected - Microsec

Axis Bank announced its Q2FY14 result on 17th October 2013.

Bank's total income increased by 1.21% QoQ and 19.97% YoY to INR4702.76 crores, driven by 26.20% and 10.86% YoY growth in its Net Interest Income (NII) and Other Income (OI) respectively. Profit After Tax (PAT) marginally decreased by 3.31% QoQ while, increased by 21.25% YoY to INR1362.31 crores.

During the quarter, Bank's loan book and total deposits expanded by 16.95% and 8.38% YoY to INR201303.16 and INR255365.10 crores respectively. On the asset quality front, GNPA and NNPA increased by 9 and 2bps QoQ to 1.19% and 0.37% respectively which is not the matter of worry. Moreover, Bank has improved its low cost deposit (CASA) by 100bps QoQ and 200bps YoY to 43%. Net Interest Margin (NIM) decreased by 7bps QoQ while, improved by 33bps YoY to 3.79%. Bank is well capitalized to support its growth trajectory, Capital Adequacy Ratio (CAR) stood at 15.85%. Provision Coverage Ratio (PCR) healthy stood at 80% which supports it to tame any time liabilities.

Valuations

Axis Bank is trading at lower valuation amongst top five Private Banks. At the CMP of INR1081, the stock is trading at TTM P/BV of 1.45x. The current valuation of 1.32x FY14E and 1.14x FY15E Book Value looks attractive. We maintain a BUY call on the stock with a target price of INR1458 (1.55x FY15E BV) with an upside potential of ~35% from the current level.

Source : Equity Bulls

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