Karvy reiterates ‘Out Performer’ on Axis Bank with target of Rs 870
Karvy Stock Broking has reiterated ‘Out Performer’ rating on Axis Bank with a price target of Rs 870 per share. The bank bank reported its earnings for first quarter ended June 2009.
By ET Bureau |
MUMBAI: Karvy Stock Broking has reiterated ���Out Performer��� rating on Axis Bank with a price target of Rs 870 per share. The bank bank reported its earnings for first quarter ended June 2009.
���In Q1FY10, Axis Bank reported 29% (Y/Y) growth in net interest income to Rs 10.5 billion (against our expectations of Rs 9.5 billion) and 47% (Y/Y) jump in operating profit to Rs 11.7 billion much higher than our expectation of Rs 9.4 billion. The bank reported healthy growth of 25% (Y/Y) in CASA deposits mobilisation and 36% (Y/Y) growth in total retail deposits which succored the bank to contain cost of funds, though decrease in yield on advances led to slight drop in NIM to 3.34% (compared to 3.35% in Q1FY09).
In FY 2009-11, we expect that the bank's total business and net profit would grow at 28.5% and 10% CAGR. On the back of healthy margin and fee-income the bank is expected to report RoAA of 1.0-1.09% and RoAE of 16.7-17.54%. At current price the stock quotes at 2.7x FY10 adjusted book value (gross book value adjusted for net NPAs and restructured assets); on basis of our target price the stock would trade at 3.1x ABV FY10. We reiterate Out Performer rating on the stock with a target price of Rs 870 at 3.1x ABV FY2010,��� said the result update report.
���In Q1FY10, Axis Bank reported 29% (Y/Y) growth in net interest income to Rs 10.5 billion (against our expectations of Rs 9.5 billion) and 47% (Y/Y) jump in operating profit to Rs 11.7 billion much higher than our expectation of Rs 9.4 billion. The bank reported healthy growth of 25% (Y/Y) in CASA deposits mobilisation and 36% (Y/Y) growth in total retail deposits which succored the bank to contain cost of funds, though decrease in yield on advances led to slight drop in NIM to 3.34% (compared to 3.35% in Q1FY09).
In FY 2009-11, we expect that the bank's total business and net profit would grow at 28.5% and 10% CAGR. On the back of healthy margin and fee-income the bank is expected to report RoAA of 1.0-1.09% and RoAE of 16.7-17.54%. At current price the stock quotes at 2.7x FY10 adjusted book value (gross book value adjusted for net NPAs and restructured assets); on basis of our target price the stock would trade at 3.1x ABV FY10. We reiterate Out Performer rating on the stock with a target price of Rs 870 at 3.1x ABV FY2010,��� said the result update report.
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