April 25, 2019 1

Rating: ACCUMULATE | CMP: Rs741 | TP: Rs837

Reasonable performance

Quick Pointers

CASA growth came in quite sluggish on much higher push on term deposits

Bank made additional provisions of Rs13.0bn, largely on some stressed

sectors, SRs and non-banking asset (land parcel)

Axis bank’s earnings were marginally below estimates at Rs15.0bn (PLe:

Rs15.7bn) mainly as strong other income growth was used to make additional

higher provisions on certain balance sheet items. NII growth came in at 20%

tad lower than estimates as bank’s focus to push retail term deposits led to

strong funding cost rise but some pass on through yields helped NIMs being

largely steady. Bank expects in medium term NIMs to move towards 3.8% but

will be flattish in FY20 mainly on challenges from lending mix & liability

accretion which remains core factor of our concern to take ROEs towards

18% by FY22. We retain Accumulate rating with revised TP to Rs837 (from

Rs845) based on 2.6x Mar-21 ABV post factoring in the reserve adjustment.

Better other income; slight struggle on NII: NII growth of 21% YoY though

looks optically better on lower base but has struggled as funding cost

expansion of 25bps was much higher compared to flattish yields. Although mix

change helped overall NIMs to be largely steady and remained within guidance

of bank. NIM outcome remains important for overall profitability & return ratios

improvement. Overall PPOP was helped by strong other income growth of 27%

YoY and better opex management led to beat in estimates. This beat helped

the bank to make higher additional provisions of Rs13.0bn

Sluggish trend in CASA as focus on term deposits: Deposits growth was

strong at 21% helping improve C-D ratio to 90%. Growth was led by strong

push towards retail term deposits (45% YoY growth) which has cannibalized

CASA balances to large extent. On loan assets, growth was slower at 12-13%

but domestic loan growth was better at 18% YoY and retail grew by 19% YoY

led from unsecured credit growth, LAP and small biz loans.

Asset quality continues on improvement path – Overall stressed asset ratio

has been coming off in last few quarters on lower downgrades to the BB &

Below book and consequently the slippages (which are largely from BB &

Below). Better upgrades and recoveries also has helped better asset quality

ratios during the quarter. Bank hold contingent provisions on certain stressed

assets but during the quarter has made additional Rs13.0bn of provisions

which are largely not considered in provisioning coverage. Provisions have

been largely on certain stressed sectors (standard assets), security receipts &

non-banking asset (land parcel) which was passed through P&L and reserves.

Management team in place now; delivery important: Axis bank has seen

re-rating in FY19 on back of lower stress ratios, improving coverage and

reducing risks on balance sheet. As management team is in largely in place,

from here on, bank has to sweat on multiple areas to improve its return ratios

and manage underwriting & economic challenges which we closely watch.

Axis Bank (AXSB IN)

April 25, 2019

Q4FY19 Result Update

☑ Change in Estimates | ☑ Target | Reco

Change in Estimates

Current Previous

FY20E FY21E FY20E FY21E

Rating ACCUMULATE ACCUMULATE

Target Price 837 845

NII (Rs. m) 257,939 304,665 256,325 307,287

% Chng. 0.6 (0.9)

Op. Profit (Rs. m) 224,816 265,271 212,265 258,238

% Chng. 5.9 2.7

EPS (Rs.) 36.5 51.6 37.1 50.8

% Chng. (1.6) 1.5

Key Financials

FY18 FY19 FY20E FY21E

NII (Rs bn) 186 217 258 305

Op. Profit (Rs bn) 156 190 225 265

PAT (Rs bn) 3 47 96 138

EPS (Rs.) 1.1 18.2 36.5 51.6

Gr. (%) (92.8) 1,538.1 100.4 41.4

DPS (Rs.) 4.4 - 1.0 6.4

Yield (%) 0.6 - 0.1 0.9

NIM (%) 3.1 3.2 3.2 3.3

RoAE (%) 0.5 7.2 13.1 16.1

RoAA (%) 0.0 0.6 1.1 1.4

P/BV (x) 3.0 2.9 2.5 2.2

P/ABV (x) 3.9 3.4 2.7 2.3

PE (x) 667.1 40.7 20.3 14.4

CAR (%) 16.6 15.8 15.6 15.2

Key Data AXBK.BO | AXSB IN

52-W High / Low Rs.789 / Rs.479

Sensex / Nifty 38,731 / 11,642

Market Cap Rs.1,907bn/ $ 27,142m

Shares Outstanding 2,572m

3M Avg. Daily Value Rs.14581.7m

Shareholding Pattern (%)

Promoter’s 23.71

Foreign 49.28

Domestic Institution 15.58

Public & Others 11.43

Promoter Pledge (Rs bn) -

Stock Performance (%)

1M 6M 12M

Absolute (0.6) 32.1 48.7

Relative (3.0) 14.9 32.5

Pritesh Bumb

priteshbumb@plindia.com | 91-22-66322232

Prabal Gandhi

prabalgandhi@plindia.com | 91-22-66322258

Axis Bank

April 25, 2019 2

Q4FY19 Financials – Non-interest income helps to sustain higher

intensity of provisions

Financial Statement (Rs m) Q4FY19 Q4FY18 YoY gr.

(%) Q3FY19

QoQ gr. (%)

Interest Income 1,47,980 1,17,712 25.7 1,41,297 4.7

Interest Expenses 90,924 70,407 29.1 85,261 6.6

Net interest income (NII) 57,056 47,305 20.6 56,037 1.8

Other income 35,263 27,887 26.5 40,007 (11.9)

Total income 92,319 75,191 22.8 96,044 (3.9)

Operating expenses 42,175 38,469 9.6 40,797 3.4

-Staff expenses 11,423 10,789 5.9 12,026 (5.0)

-Other expenses 30,752 27,680 11.1 28,771 6.9

Operating profit 50,144 36,722 36.6 55,247 (9.2)

Core operating profit 46,604 34,562 34.8 51,457 (9.4)

Total provisions 27,114 71,795 (62.2) 30,545 (11.2)

Profit before tax 23,030 (35,073) (165.7) 24,701 (6.8)

Tax 7,979 (13,186) (160.5) 7,893 1.1

Profit after tax 15,051 (21,887) (168.8) 16,809 (10.5)

Balance sheet (Rs m)

Deposits 54,84,713 45,36,227 20.9 51,40,921 6.7

Advances 49,47,980 43,96,503 12.5 47,51,049 4.1

Ratios (%)

Profitability ratios

RoaA 0.8 (1.3) 209 0.9 (8)

NIM 3.4 3.3 11 3.5 (3)

Cost of Funds 5.7 5.1 58 5.4 25

Asset Quality

Gross NPL 2,97,894 3,42,486 (13.0) 3,08,547 (3.5)

Net NPL 1,12,756 1,65,917 (32.0) 1,22,333 (7.8)

Gross NPL ratio 5.26 6.8 (151) 5.8 (49)

Net NPL ratio 2.06 3.4 (134) 2.4 (30)

Coverage ratio (Calc) 62.1 51.6 1,059 60.4 180

Business & Other Ratios

Low-cost deposit mix 44.4 54.0 (962) 46.0 (162)

Cost-income ratio 45.7 51.2 (548) 42.5 321

Non int. inc / total income 38.2 37.1 111 41.7 (346)

Credit deposit ratio 90.2 96.9 (671) 92.4 (220)

CAR 15.8 16.6 (73) 16.4 (56)

Tier-I 12.5 13.0 (50) 13.1 (53)

Source: Company, PL

Retail continues to drive with steady growth

(Rs m) Q4FY19 Q4FY18 YoY gr.

(%) Q3FY19

QoQ gr. (%)

Large & mid-corporate 18,34,020 17,44,460 5.1 18,04,690 1.6

SME Advances 6,55,840 5,87,400 11.7 6,22,380 5.4

Retail 24,58,120 20,64,640 19.1 23,23,970 5.8

- Housing Loans & LAP 9,34,086 8,25,856 13.1 9,06,348 3.1

- Personal loans 2,94,974 2,06,464 42.9 2,55,637 15.4

- Auto loans 2,70,393 2,27,110 19.1 2,55,637 5.8

Source: Company, PL

Robust NII growth on account of NIM

improvement and loan growth

Other income shoots up on 64% YoY

rise in capital gains & 23%YOY

growth in core fee income

Opex cost has been broadly under

control

Provisions grew 35% partially on

increase in PCR and on back of

higher additional provisions on certain

stressed sectors, SRs & non-banking

asset (land parcel).

Deposits growth was quite strong led

by robust traction in TDs both retail

and wholesale

NIM improved 11bps as retail mix

continues to improve to 50% of

overall book

Asset quality overall improved on

strong recoveries and lower slippage

intensity. Bank continued to improve

its PCR to 77%

CASA mix has been coming off due

to bank incremental focus on

garnering TDs as well for better

stability and cost perspective

Axis Bank

April 25, 2019 3

Key Q4FY19 Concall Highlights

Business Outlook & Strategy

Bank continues to drive growth by steadfast focus on sustainability, disciplined

execution & conservative approach towards asset quality recognition.

Consequently, bank has reoriented its strategy towards retail for both liabilities

build up and advance accretion. However, deposits are coming at a higher rate

(7.3% v/s 6.8% earlier) as competition has intensified.

Bank is focusing on leveraging existing relationships (92% retail loans are to

existing liability customers) while dedicated sales force is deployed to drive

new customer acquisition. Simultaneously, third party products are expected

to drive non-interest income growth.

Overseas book (which de-grew 29% YoY) has bottomed out. Overseas book

forms ~7.8% of total advance book. Personal loan (6% of total book) is well

within the 14% guidance given by the bank, and given the emerging demand

has lot of room to improve further.

Liability side

SA deposits grew merely 4% YoY as customers look to make transition

towards higher interest giving deposits which resulted in retail TD growth of

44% YoY. These deposits are granular (2/3rd of term deposits are from

individual customers). Also, by focusing on retails TD, bank is able to maintain

its CD ratio. CD ratio has declined continuously after peaking during 1Q19

(99%) to 90% as of 4Q19.

Margins

Cost of funds moved up 25bps on back of higher rate on deposits, although

pass through by MCLRs rates and coupled with better retail lending mix/shift

to mid-corporate, NIMs are expected to remain flat in FY20 at 3.4-3.5%.

Asset Quality

Additional provisioning – Bank did additional Rs13.0bn of provisions largely

on (i) Identified two additional sectors towards standard but stressed providing

Rs1.6bn and this would mainly parameter driven (ii) Higher provisions on SR

book of Rs2.2bn (iii) Provisions of Rs5.5bn towards back of non-banking land

assets swapped with stressed account on back of RBI guidelines.

Total SR book stood at Rs29.10bn on which bank has made ~Rs2.5bn of

provisions, of which ~Rs2.2bn provisions were made in 4Q19.

Agri book witnessed net negative slippage during the quarter on strong

recoveries.

Non-fund exposure of BB&below book stands at Rs22bn. All accounts are

classified as standard. BB&below book saw slippage of Rs9.2bn which pertains

to 2 accounts, of which one is in power sector.

Corporate slippages stood at 13.7bn of which 72% came from BB&below book.

One account in Engg sector (slippage of 3.35bn) was outside BB&below book.

Axis Bank

April 25, 2019 4

NIMs remained steady as bank does liability cost

and loan mix management

3.3%

3.4%

3.5%

3.6%

3.7%

3.8%

3.9%

4.0%

4.1%

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

NIM (%)

Source: Company, PL

CASA growth decline from strong growth in retail

TD has led to CASA share decline

40%

42%

44%

46%

48%

50%

52%

54%

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

Low Cost deposits(%)

Source: Company, PL

MCLR share remained steady while fixed saw improvement

50%42%

34% 29% 24%18% 15% 13% 12% 10%

29%36%

40%43%

49% 50% 54% 56% 56%

16% 15% 16% 17% 19% 20% 21% 21% 21% 25%

16% 14% 14% 14% 14% 13% 14% 12% 11% 9%

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

Base Rate MCLR Fixed LIBOR

Source: Company, PL

Retail fees continue its dominance as retail book grew 19%YoY

32% 33% 33% 34% 35% 34% 35%22%

36% 43%

20% 20% 21% 21% 22% 20%26%

22%23% 27%

22% 22% 20% 19% 20%20%

20%18% 20% 20%

5% 5%4% 4%

5% 6%4% 4% 4% 6%1% 1% 4% 1%

1% 2%2% 2% 3% 3%

20% 20% 18% 21% 17% 18% 13% 11% 14% 16%

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

Retail (non card) Retail (card) Transc. Bnking

SME Treasury & DCM Corp Fees

Source: Company Data, PL Research

Axis Bank

April 25, 2019 5

C/I hovering from 42-46% range during last few quarters

34%

36%

38%

40%

42%

44%

46%

48%

50%

52%

54%

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

cost-income

Source: Company, PL

GNPA improved on lower slippages and strong recoveries

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

Gross NPA (%) Net NPA (%) Coverage Ratio (%) - RHS

Source: Company, PL

Corporate book continuously shifting towards better ratings

60%

62

%

60%

61%

62

%

62

%

64%

63

%

63

%

66

%

68

%

70

%

74%

77

%

78%

79

%

82%

82%

31

%

29%

29%

28

%

27

%

26

%

20%

22%

23%

22

%

22

%

19

%

17

%

18

%

16

%

16%

14

%

14

%

9% 9% 11% 11% 11% 12% 16% 15% 14% 12% 10% 11% 9% 5% 6% 5% 4% 4%

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

AAA/AA/A BBB <BB or unrated

Source: Company, PL

Axis Bank

April 25, 2019 6

SME book tilts towards risky assets but seasonality

82%

84%

83%

85%

84%

84%

83%

84%

85%

84%

85%

86%

87%

88%

88%

89%

86%

85%

11% 9% 9% 8% 8% 8% 8% 8% 8% 9% 9% 8% 8% 6% 6% 6% 8% 8%

7% 7% 8% 7% 8% 8% 9% 8% 7% 7% 6% 5% 5% 6% 6% 5% 6% 7%

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

4Q

18

1Q

19

2Q

19

3Q

19

4Q

19

SME 1-3 SME 4 SME 5-8

Source: Company, PL

Net Stressed loan outside the NPA decreases to 1.7% of Net customer assets

Stressed Loans (Rs Mn) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

Gross slippages 36,380 87,720 45,600 48,110 35,190 89,360 44,280 165,360 43,370 27,770 37,460 30,120

Recoveries+ Up gradations 1,400 10,730 3,500 28,040 3,060 10,480 40,080 34,010 29,170 21,860 16,220 23,760

Write-offs 320 8,730 1,220 11,940 24,620 25,170 28,220 38,870 30,070 23,150 22,070 17,010

Slippages (%) 4.26% 10.05% 5.21% 5.34% 3.71% 8.98% 4.26% 15.37% 3.94% 2.48% 3.22% 2.48%

BB & Below Book 274,110 219,300 207,880 196,850 194,600 158,150 161,200 89,940 103,960 88,600 76,450 74,670

% of customer assets 7.4% 5.7% 5.5% 4.8% 4.6% 3.5% 3.5% 1.8% 2.2% 1.7% 1.4% 1.3%

Watch List 202,950 137,890 110,910 94,360 79,410 60,520 53,090 4,280

Corp Restructured Advances 76,650 68,830 62,420 54,890 54,320 38,600 35,250 10,810 11,588 11,987 8,737 10,339

SDR / S4A / 5-25 Advances 52,630 51,580 43,510 46,090 49,720 52,770 52,880 10,890 16,882 15,573 14,823

Total Restructured Dispensation 124,920 117,640 104,220 101,200 96,450 73,900 69,850 20,650 28,470 27,560 23,560

% of loans 3.6% 3.3% 3.0% 2.7% 2.5% 1.8% 1.7% 0.5% 0.6% 0.5% 0.3%

Total stress (adjusted for overlaps) 334,680 268,580 235,450 207,610 189,910 174,420 159,260 91,060 122,360 109,280 66,510 98,230

% of Customer Assets 9.7% 7.6% 6.8% 5.6% 4.5% 3.9% 3.5% 1.9% 2.5% 2.1% 1.8% 1.7%

Source: Company, PL

Estimates change table – We tweak estimates on back of additional provisions on P&L & networth and higher

other income

(Rs mn) Old Revised %Change

FY20E FY21E FY20E FY21E FY20E FY21E

Net interest income 2,56,325 3,07,287 2,57,939 3,04,665 0.6 (0.9)

Operating profit 2,12,265 2,58,238 2,24,816 2,65,271 5.9 2.7

Net profit 96,804 1,32,737 95,880 1,38,494 (1.0) 4.3

EPS (Rs) 37.1 50.8 36.5 51.6 (1.6) 1.5

ABVPS (Rs) 271.8 321.5 270.8 318.9 (0.4) (0.8)

Price target (Rs) 845 837 (0.9)

Recommendation ACCUMULATE ACCUMULATE

Source: Company, PL

Axis Bank

April 25, 2019 7

We revise our TP to Rs837 (from Rs845) based on 2.6x Mar-21 ABV

PT calculation and upside

Terminal growth 5.0%

Market risk premium 6.0%

Risk-free rate 7.5%

Adjusted beta 1.03

Cost of equity 13.7%

Fair price - P/ABV 837

Target P/ABV 2.6

Target P/E 16.2

Current price, Rs 741

Upside (%) 13%

Dividend yield (%) 1%

Total return (%) 14%

Source: Company, PL

AXSB’s historical P/ABV trends

0.8

1.2

1.6

2.0

2.4

2.8

3.2

3.6

Apr-

13

Jul-13

Oct-13

Jan-1

4

Apr-

14

Jul-14

Oct-14

Jan-1

5

Apr-

15

Jul-15

Oct-15

Jan-1

6

Apr-

16

Jul-16

Oct-16

Jan-1

7

Apr-

17

Jul-17

Oct-17

Jan-1

8

Apr-

18

Jul-18

Oct-18

Jan-1

9

Apr-

19

P/ABV 3 yr avg. avg. + 1 SD avg. - 1 SD

Source: Company, PL

Axis Bank

April 25, 2019 8

Income Statement (Rs. m)

Y/e Mar FY18 FY19 FY20E FY21E

Int. Earned from Adv. 341,375 413,220 486,696 568,449

Int. Earned from invt. 99,833 113,491 147,617 186,558

Others 16,595 23,146 25,154 19,051

Total Interest Income 457,803 549,857 659,467 774,058

Interest Expenses 271,626 332,776 401,528 469,392

Net Interest Income 186,177 217,081 257,939 304,665

Growth(%) (0.7) 17.8 16.4 16.1

Non Interest Income 109,671 131,303 147,716 166,181

Net Total Income 295,848 348,385 405,655 470,846

Growth(%) 0.9 20.0 18.5 16.5

Employee Expenses 43,130 47,473 53,170 59,550

Other Expenses 91,093 105,254 122,095 140,409

Operating Expenses 139,903 158,334 180,839 205,576

Operating Profit 155,945 190,051 224,816 265,271

Growth(%) (11.3) 21.9 18.3 18.0

NPA Provision 165,987 102,220 77,127 55,309

Total Provisions 154,729 120,310 82,349 59,484

PBT 1,216 69,740 142,466 205,787

Tax Provision (1,541) 22,975 46,586 67,292

Effective tax rate (%) (126.8) 32.9 32.7 32.7

PAT 2,757 46,766 95,880 138,494

Growth(%) (92.5) 1,596.4 105.0 44.4

Balance Sheet (Rs. m)

Y/e Mar FY18 FY19 FY20E FY21E

Face value 2 2 2 2

No. of equity shares 2,567 2,572 2,685 2,685

Equity 5,133 5,143 5,370 5,370

Networth 634,453 666,763 799,683 917,333

Growth(%) 13.8 5.1 19.9 14.7

Adj. Networth to NNPAs 165,917 112,758 63,314 44,101

Deposits 4,536,227 5,484,713 6,471,962 7,636,915

Growth(%) 9.5 20.9 18.0 18.0

CASA Deposits 2,438,516 2,433,940 2,951,215 3,551,165

% of total deposits 53.8 44.4 45.6 46.5

Total Liabilities 6,913,296 8,009,965 9,323,812 10,816,121

Net Advances 4,396,503 4,947,980 5,690,177 6,600,605

Growth(%) 17.8 12.5 15.0 16.0

Investments 1,538,761 1,749,693 2,379,954 2,800,837

Total Assets 6,913,296 8,009,965 9,323,812 10,816,121

Growth (%) 14.9 15.9 16.4 16.0

Asset Quality

Y/e Mar FY18 FY19 FY20E FY21E

Gross NPAs (Rs m) 342,486 297,896 236,713 198,247

Net NPAs (Rs m) 165,917 112,758 63,314 44,101

Gr. NPAs to Gross Adv.(%) 7.8 6.0 4.2 3.0

Net NPAs to Net Adv. (%) 3.8 2.3 1.1 0.7

NPA Coverage % 51.6 62.1 73.3 77.8

Profitability (%)

Y/e Mar FY18 FY19 FY20E FY21E

NIM 3.1 3.2 3.2 3.3

RoAA 0.0 0.6 1.1 1.4

RoAE 0.5 7.2 13.1 16.1

Tier I 13.0 12.5 11.3 11.4

CRAR 16.6 15.8 15.6 15.2

Source: Company Data, PL Research

Quarterly Financials (Rs. m)

Y/e Mar Q1FY19 Q2FY19 Q3FY19 Q4FY19

Interest Income 127,770 132,810 141,297 147,980

Interest Expenses 76,102 80,489 85,261 90,924

Net Interest Income 51,668 52,321 56,037 57,056

YoY growth (%) 18.2 20.2 22.0 29.1

CEB 21,170 23,760 26,150 30,200

Treasury - - - -

Non Interest Income 29,250 26,784 40,007 35,263

Total Income 157,020 159,594 181,304 183,243

Employee Expenses 12,278 11,747 12,026 11,423

Other expenses 24,920 26,418 28,771 30,752

Operating Expenses 37,198 38,165 40,797 42,175

Operating Profit 43,720 40,940 55,247 50,144

YoY growth (%) 1.9 8.4 43.4 36.6

Core Operating Profits 42,690 39,580 51,457 46,604

NPA Provision 30,690 26,860 33,520 11,150

Others Provisions 33,377 29,274 30,545 27,114

Total Provisions 33,377 29,274 30,545 27,114

Profit Before Tax 10,343 11,666 24,701 23,030

Tax 3,333 3,770 7,893 7,979

PAT 7,011 7,896 16,809 15,051

YoY growth (%) (46.3) 82.6 131.4 (168.8)

Deposits 4,470,793 4,796,796 5,140,921 5,484,713

YoY growth (%) 13.5 15.2 25.7 20.9

Advances 4,410,745 4,561,213 4,751,049 4,947,980

YoY growth (%) 14.4 11.2 12.9 12.5

Key Ratios

Y/e Mar FY18 FY19 FY20E FY21E

CMP (Rs) 741 741 741 741

EPS (Rs) 1.1 18.2 36.5 51.6

Book Value (Rs) 247 259 298 342

Adj. BV (70%)(Rs) 192 219 271 319

P/E (x) 667.1 40.7 20.3 14.4

P/BV (x) 3.0 2.9 2.5 2.2

P/ABV (x) 3.9 3.4 2.7 2.3

DPS (Rs) 4.4 - 1.0 6.4

Dividend Payout Ratio (%) 509.8 - 3.3 15.1

Dividend Yield (%) 0.6 - 0.1 0.9

Efficiency

Y/e Mar FY18 FY19 FY20E FY21E

Cost-Income Ratio (%) 47.3 45.4 44.6 43.7

C-D Ratio (%) 96.9 90.2 87.9 86.4

Business per Emp. (Rs m) 150 156 164 173

Profit per Emp. (Rs lacs) 0 7 13 17

Business per Branch (Rs m) 2,412 2,576 2,611 2,658

Profit per Branch (Rs m) 1 12 21 26

Du-Pont

Y/e Mar FY18 FY19 FY20E FY21E

NII 3.13 3.15 3.22 3.28

Total Income 4.98 5.06 5.07 5.07

Operating Expenses 2.35 2.30 2.26 2.21

PPoP 2.62 2.76 2.81 2.85

Total provisions 2.60 1.75 1.03 0.64

RoAA 0.05 0.68 1.20 1.49

RoAE 0.46 7.19 13.08 16.13

Source: Company Data, PL Research

Axis Bank

April 25, 2019 9

Price Chart Recommendation History

No. Date Rating TP (Rs.) Share Price (Rs.)

1 27-Apr-18 BUY 585 495

2 10-Jul-18 BUY 585 525

3 31-Jul-18 Accumulate 624 570

4 5-Oct-18 Accumulate 624 586

5 2-Nov-18 Accumulate 681 611

6 7-Jan-19 Accumulate 681 637

7 29-Jan-19 Accumulate 745 661

8 20-Mar-19 Accumulate 845 761

9 5-Apr-19 Accumulate 845 762

Analyst Coverage Universe

Sr. No. CompanyName Rating TP (Rs) Share Price (Rs)

1 Axis Bank Accumulate 845 762

2 Bank of Baroda BUY 161 114

3 Bank of India Reduce 89 106

4 Federal Bank BUY 102 99

5 HDFC Bank BUY 2,700 2,293

6 HDFC Standard Life Insurance Company BUY 438 386

7 ICICI Bank BUY 427 391

8 ICICI Prudential Life Insurance Company BUY 511 368

9 IDFC First Bank BUY 57 43

10 IndusInd Bank BUY 1,791 1,768

11 Jammu & Kashmir Bank BUY 76 59

12 Kotak Mahindra Bank Hold 1,291 1,336

13 Max Financial Services BUY 629 439

14 Punjab National Bank Hold 83 73

15 SBI Life Insurance Company BUY 779 612

16 South Indian Bank BUY 361 317

17 State Bank of India BUY 361 284

18 Union Bank of India Reduce 79 93

19 YES Bank Accumulate 245 267

PL’s Recommendation Nomenclature (Absolute Performance)

Buy : > 15%

Accumulate : 5% to 15%

Hold : +5% to -5%

Reduce : -5% to -15%

Sell : < -15%

Not Rated (NR) : No specific call on the stock

Under Review (UR) : Rating likely to change shortly

432

524

616

708

800

Ap

r -

16

Oct

- 16

Ap

r -

17

Oct

- 17

Ap

r -

18

Oct

- 18

Ap

r -

19

(Rs)

Axis Bank

April 25, 2019 10

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