Sharekhan has given Buy recommendation for Axis Bank with a target price of Rs. 940 in its research report issued on Mar 31, 2022

Sharekhan’s research report on Axis Bank

Axis Bank has entered into an agreement to acquire Citibank’s consumer businesses – covering loans, credit cards, wealth management and retail banking operations in India. The bank will pay a consideration up to Rs. 12,325 crore to Citibank for the acquisition along with an estimated equity requirement of Rs. 3,450 crore at an implied PE of 18.7x on normalised CY20 standalone financials. This acquisition would bring in loans and deposits of Rs. 27,400 crore and Rs. 50,200 crore, respectively, including credit card accounts worth Rs. 8,900 crore ending net receivables. Credit cards book is likely to increase by 57% to Rs. 24,400 crore after the deal.

Outlook

The bank currently trades at 1.8x/1.6x its FY23E and FY24E BVPS. We maintain a Buy rating with an unchanged PT of Rs. 940.

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