Axis Bank - Risks to earnings remain - Emkay

Reco: ACCUMULATE
CMP: Rs 1176
Target Price: Rs 1450

- AXSB Q3FY14 NII/PPOP at Rs29.8/26.1bn -below estimates, driven by a) 8bp qoq drop in NIMs, b) modest 4% growth in fee income and (3) marginally higher Opex

- Stressed assets addition moderate to Rs12.6bn. Guidance on slippages + restructuring retained at Rs60bn for FY14, implies probable balance addition of Rs17bn in Q4

- The risks to earnings panning out as we expected with operating earnings growth (adjusted for one-off) having slowed to 11-13% for past two quarter

- Even as we are retaining our earnings and don't see near term earnings catalysts, PER at 8x 1-yr forward and P/ABV at 1.4x 1-yr forward are not unreasonable. Assign ACCUMULATE.

Source : Equity Bulls

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