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Research
Gladiator Stocks - Axis Bank - ICICI Direct
Posted On : 2021-07-07 11:31:22( TIMEZONE : IST )
Technical View
The Bank Nifty is resuming its fresh up move after four weeks of shallow retracement. Within the Banking space, Axis Bank has undergone a healthy base formation for the last five months. The current higher base formation above 20 weeks EMA (currently at Rs. 720) and the lower band of the rising channel in place since June 2020, signifies elevated buying demand. Hence, it offers a fresh entry opportunity
The stock has already taken 19 weeks to retrace less than 80% of its preceding nine weeks rally (Rs. 569 to 799). A shallow retracement highlights positive structure and a higher base formation
Fundamental View
Axis Bank, the third largest private bank in terms of advances, offers the entire spectrum of financial services to customers covering large and mid-corporates, MSME, agriculture and retail businesses. The long term focus is on loans offering higher return on risk-weighted basis and tight control on cost to enhance return ratios
Axis has strong domestic network with 4594 branches which has been built organically enabling it to pedal business growth. Further, recent budget announcement of focus on infra push, focus on affordable home loans and strengthening of NCLT framework enabling faster resolution is positive for the bank
Pandemic and resultant lock down has impacted collections in general and asset quality could witness some stress in near term but overall outlook for FY22 is better with fast recovery in 2HFY22E onwards. The bank has healthy provision coverage with cumulative contingent provisions of 120% of GNPA, which provides comfort on smoothening earnings trajectory ahead. Therefore, expect earnings to grow at ~64% CAGR in FY21-23E and improvement in RoE at ~14% in FY23E
For details, click on the link below: Link to the report
Shares of AXIS BANK LTD. was last trading in BSE at Rs.758.65 as compared to the previous close of Rs. 760.15. The total number of shares traded during the day was 160074 in over 5410 trades.
The stock hit an intraday high of Rs. 767 and intraday low of 755.35. The net turnover during the day was Rs. 121951654.
