Emkay Global Financial has given Buy recommendation for Axis Bank with a target price of Rs. 960 in its research report issued on Jul 27, 2021

Emkay Global Financial’s report on Axis Bank

Axis Bank reported a slight miss on PAT at Rs21.6bn (vs. est. Rs22.9bn) in Q1FY22 due to subdued margins and higher opex/provisions. Higher-than-expected gross slippages (84% retail) led to a 15bps rise in GNPA to 3.85%. However, the bank did not utilize the Covid-related buffer in Q1, which remains steady and healthy at 0.8% of loans. Credit growth was moderate at 12% yoy/-1% qoq, lagging large peers (14-17%). However, the bank expects a better growth trajectory as the economy opens up, led by retail and SME businesses. As per Axis, the changing portfolio mix toward high-margin retail and the reduction in RIDF should boost margins. Axis has significantly revamped its subsidiaries (mainly Axis Cap/Axis Sec/Axis Fin) in past 3 years and made strategic investments in insurance (Maxlife) and fintech (Freecharge) as part of its ‘One Axis’ strategy to become a financial super-store. We believe there is huge scope to scale up subsidiaries in line with peers and drive up value for shareholders.


The bank has undergone a major transformational journey, fortified the balance sheet and revved up the digital banking platform. We believe it is now ready to accelerate growth and deliver better return ratios (RoA/RoE at 1.5-1.6%/15-16% in FY23-24E). Retain Buy with a TP of Rs960 (valuing core bank at 2x Sep’23E ABV and subs/investment at Rs75).

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