KR Choksey has given Buy recommendation for Axis Bank with a target price of Rs. 1120 in its research report issued on Oct 22, 2022

KR Choksey’s research report on Axis Bank

AXSB’s Net Interest Income (NII) grew 31.1% YoY to INR 1,03,603 Mn in Q2FY23. Net interest margin (NIM) for Q2FY23 stood at 3.96%, improved 36 bps QoQ and 57 bps YoY. The bank’s PPOP for the quarter was INR 77,162 Mn, a growth of 30.2% YoY/ 31.1% QoQ led by healthy operating income and lower operating cost. Net profit grew 70.1% YoY (+29.2% QoQ) from INR 31,333 Mn in Q2FY22 to INR 53,298 Mn in Q2FY23 owing to lower provisions & robust growth in operating profits. AXSB’s advances grew 17.6% YoY to INR 7,309 Bn as of September 30, 2022. The total deposits grew by 10.1% YoY at INR 8,109 Bn. As of September 30, 2022, the bank’s reported Gross NPA and Net NPA levels were 2.50% and 0.51% respectively as against 2.76% and 0.64% as of June 30, 2022. Overall capital adequacy ratio (CAR) stood at 17.7% with CET-1 ratio at 15.1%.


We revise our target price to INR 1,120 per share (earlier INR 936), applying 2.2x P/ABV multiple to an adjusted book value of INR 509.5. This implies an upside of 23.2% over the CMP. We maintain our rating on the share of AXSB at “BUY”.

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