Axis Bank - Q3FY14 Result Update - Microsec

Axis Bank Ltd. announced its Q3FY14 result on 16th January 2014.

The Bank's total income decreased by 1.58% QoQ while, increased by 12.61% YoY to INR4628.43 crores, driven by 19.61% YoY growth in its Net Interest Income (NII). Whereas, Profit After Tax (PAT) increased by 17.75% QoQ and 19.07% YoY to INR1604.11 crores. During the quarter, the Bank has reduced its provisions by 70.55% QoQ and 47.65% YoY to INR202.49 crores, which has helped it to improve its bottom line.

The Bank's loans book and total deposits expanded by 17.81% and 7.32% YoY to INR211467.34 and INR262397.61 crores respectively. On the asset quality front, Gross NPA and Net NPA increased 6 and 5bps QoQ to 1.25% and 0.42% respectively which is not the matter of worry. However, the Bank has improved its low cost deposits base (CASA ratio) by 300bps YoY to 43% which has improved its Net Interest Margin (NIM) by 14bps YoY to 3.71%. Moreover, the Bank is well capitalized to support its growth trajectory with 15.50% of its Basel III Capital Adequacy Ratio (CAR), which is 6.50% higher than the regulator's stipulated norm. Provision Coverage Ratio (PCR) stood at 78%.

Valuations

Axis Bank is trading at lower valuation amongst top five Private Banks. At the CMP of INR1180, the stock is trading at TTM P/BV of 1.67x. The current valuation of 1.45x FY14E and 1.25x FY15E Book Value looks attractive. We maintain a BUY call on the stock with a price target of INR1458 (1.55x FY15E BV) with an upside potential of ~24% from the current level.

Source : Equity Bulls

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