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Axis Bank
BSE SENSEX
18,714
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel.Perf.(%)
S&P CNX
5,687
CMP: INR1,119
TP: INR1,330
Buy
AXSB IN
413.2
1,309/785
9/-16/-8
M.Cap. (INR b)
462.4
M.Cap. (USD b)
8.7
Axis Bank's 2QFY13 PAT grew 22% YoY to INR11.2b (inline) helped by healthy NIM, fee income performance and
contained cost. While one large chunky account led to higher slippages, healthy operating profits helped AXSB to
write off aggressively and maintain GNPA (%) and PCR (%) at the 1QFY13 levels. Key highlights:
Reported NIM improved 9bp QoQ to 3.46% (in line with our estimate) despite 380bp decline in CD ratio, led by
running off of low yielding priority sector loans and 16bp QoQ decline in cost of funds.
Gross slippages increased to INR6.3b (v/s INR4.56b in 1QFY13), led by one large account slipping into NPA.
Net addition to restructured loans was just INR2.4b (~12bp of loans; v/s INR7.7b in 1QFY13). As a result, net
stress addition was INR7.3b compared to INR11.6b a quarter ago.
Strong growth in fee income (+16% QoQ and 20% YoY) was driven by retail fees (+29% QoQ and 43% YoY) and
pick-up in corporate related fees (+6% QoQ and 15% YoY).
Other highlights: (1) Traction in SA deposits continued with 6% QoQ and 20% YoY growth, (2) Reported loans
grew 23% YoY (flat QoQ), led by strong growth in retail (+9% and 51% YoY) and SME segments (+7% QoQ and
15% YoY), and (3) the bank prudently made contingent provision of INR1.15b.
Valuation and view: Axis Bank's key strength has been its ability to grow CASA deposits (~35% CAGR over FY0612). Given its strong and rapidly growing liability franchise, we expect SA deposit growth to remain healthy.
While pressure on asset quality has risen, it remains under check. Healthy NII and fee income growth with stable
C/I ratio should lead to core operating profit and PAT CAGR of 19% and 15%, respectively over FY12-14. Buy.
Axis Bank
Quarterly performance v/s our estimates and reasons for deviation (INR m)
Y/E March
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
2QFY13A
23,269
16
15,931
39,200
17,417
21,783
23
5,094
16,688
5,453
11,235
22
Comments
Margin performance was as per expectation
Strong fee income growth and higher trading gains
Strong fees and trading gain provide cushion against higher provisions
Strong growth in non-interest income (9% above estimate) compensated for higher
than expected provisions (39% above est.; of which INR4.1b pertained to NPA
provisions) as a result PAT was in-line with estimate. Fee income grew 20% YoY and
16% QoQ to INR13.4b led by strong growth in retail fees (+29% QoQ and 43% YoY) and
improvement in corporate banking fees (+6% QoQ and 15% YoY).
Treasury related fees stood at INR2.95b as compared to INR2.4b a quarter ago and
INR2.7b a year ago. Growth in agri. and SME banking was strong as well at 28% QoQ
(+26% YoY), though on a lower base. During the quarter bank booked trading gain of
INR2.1b of which gain from equity was INR950m - included one-off gains on stake sale
in the AMC business.
16 October 2012
Axis Bank
Other details
Tier I Capital (including 1Q profit) at 9.9%: Overall CAR of the bank stood at 13.9%,
of which Tier I ratio stood at 9.9%.
Cost to core income ratio increases marginally QoQ: Opex grew 12% QoQ and 19%
YoY led by 20% sequential growth in other opex (on a lower base). Employee
expense was flat QoQ and grew 16% YoY. As a consequence, cost to income ratio
stood increased marginally to 47.6% as compared to 46.5% a quarter ago and 46.9%
a year ago. During the quarter, AXSB opened 60 branches taking the overall branch
network to 1,741.
16 October 2012
Axis Bank
16 October 2012
Axis Bank
FY13
92.2
62.3
154.4
69.7
84.7
15.7
69.0
22.4
46.6
3.2
0.8
1.5
18.8
FY14
110.0
73.0
183.0
80.9
102.1
22.9
79.1
25.7
53.4
3.3
0.9
1.5
18.4
FY13
95.7
64.5
160.2
70.0
90.3
18.4
71.9
23.4
48.5
3.3
0.9
1.6
19.5
Revised
FY14
115.3
75.0
190.4
82.9
107.5
24.8
82.7
26.9
55.8
3.4
1.0
1.5
19.1
Change (%)
FY13
FY14
3.9
4.8
3.6
2.8
3.8
4.0
0.4
2.4
6.6
5.3
17.1
8.3
4.2
4.4
4.2
4.4
4.2
4.4
Source: MOSL
16 October 2012
Axis Bank
Quaterly trends
Above industry average loan growth
(%)
16 October 2012
Axis Bank
Opex grew 12% QoQ and 19% YoY led by 20% sequential
growth in other opex (on a lower base)
16 October 2012
Axis Bank
Quarterly Snapshot
FY12
1Q
Profit and Loss (INR m)
Net Interest Income
17,241
Other Income
11,679
Trading profits
702
Fee Income
10,560
Miscellaneous Income
416
Total Income
28,920
Operating Expenses
13,335
Employee
5,100
Others
8,235
Operating Profits
15,585
Provisions
1,758
PBT
13,826
Taxes
4,403
PAT
9,424
Asset Quality
GNPA
15,731
NNPA
4,625
GNPA (%)
1.1
NNPA (%)
0.3
PCR (Calculated, %)
71
PCR (Reported, %)
80
Slippages
2,960
Slippage Ratio
1.1
Prov. for NPA in qtr
1,530
Credit Cost
0.4
Restructured loans
21,510
% to Loans
1.6
Ratios (%)
Fees to Total Income
36.5
Cost to Core Income
48.0
Tax Rate
31.8
CASA (Cal.)
40.5
Loan/Deposit
71.8
CAR
13.0
Tier I
9.8
RoA (cal)
1.6
RoE (Cal)
19.3
Fee income distribution
Large and Mid Corp
4,130
Treasury & DCM
2,100
Agri and SME
460
Business Banking
950
Capital Markets
160
Retail Banking
2,760
Margins - Cal (%)
Yield on loans
10.1
Yield On Investments
7.2
Yield on Funds
9.0
Cost of funds
6.0
Margins
3.2
Margins - Reported (%)
Cost of Funds
6.1
Margins
3.3
Franchise
Branches
1,411
For %age change QoQ and YoY is bp
16 October 2012
FY13
1Q
2Q
Variation (%)
Cumulative Numbers
QoQ
YoY 1HFY12 1HFY13 YoY Gr (%)
2Q
3Q
4Q
20,073
12,349
280
11,240
829
32,422
14,665
4,986
9,679
17,756
4,056
13,701
4,497
9,203
21,403
14,298
1,180
12,210
908
35,701
15,109
5,420
9,689
20,592
4,223
16,369
5,346
11,023
21,461
15,876
1,460
13,260
1,156
37,337
16,962
5,296
11,666
20,376
1,393
18,983
6,210
12,773
21,799
13,355
1,500
11,580
275
35,154
15,517
5,826
9,691
19,637
2,588
17,048
5,513
11,535
23,269
15,931
2,070
13,430
431
39,200
17,417
5,779
11,638
21,783
5,094
16,688
5,453
11,235
7
19
38
16
57
12
12
-1
20
11
97
-2
-1
-3
16
29
639
19
-48
21
19
16
20
23
26
22
21
22
37,314
24,028
982
21,800
1,246
61,342
28,000
10,086
17,915
33,341
5,814
27,527
8,900
18,627
45,068
29,286
3,570
25,010
706
74,354
32,934
11,605
21,329
41,419
7,683
33,737
10,966
22,771
21
22
263
15
-43
21
18
15
19
24
32
23
23
22
17,438
5,488
1.1
0.3
69
78
4,960
1.8
2,470
0.7
24,100
1.7
19,145
6,829
1.1
0.4
64
75
5,350
1.7
3,340
0.9
27,010
1.8
18,063
4,726
0.9
0.3
74
81
5,140
1.4
1,270
0.3
30,600
1.8
20,917
6,049
1.1
0.3
71
79
4,560
1.4
2,610
0.6
38,270
2.2
21,910
6,542
1.1
0.3
70
80
6,280
1.8
4,070
0.9
40,680
2.4
5
8
4
2
-94
100
38
41
56
34
6
13
26
19
2
-1
161
231
27
0
65
22
69
64
17,438
5,488
1.1
0.3
69
78
21,910
6,542
1.1
0.3
70
80
26
19
2
-1
161
231
34.7
46.8
32.8
42.2
72.0
12.2
9.3
1.5
18.0
34.2
45.0
32.7
41.6
71.3
13.1
9.6
1.7
20.4
35.5
48.9
32.7
41.5
77.1
13.7
9.5
1.8
22.7
32.9
46.5
32.3
39.1
76.9
13.5
9.5
1.6
19.6
34.3
47.5
32.7
40.5
73.1
13.9
9.9
1.5
18.2
35.5
47.4
32.3
33.6
47.0
32.5
3,790
2,740
640
970
150
2,950
4,730
2,320
660
1,090
130
3,280
4,420
2,490
1,170
1,280
130
3,770
4,090
2,380
630
1,100
120
3,260
4,350
2,955
841
940
134
4,210
6
24
33
-15
12
29
15
8
31
-3
-10
43
7,920
4,840
1,100
1,920
310
5,710
8,440
5,335
1,471
2,040
254
7,470
10.8
7.7
9.6
6.1
3.7
11.0
8.1
9.9
6.3
3.7
10.7
7.6
9.5
6.3
3.4
10.9
8.0
9.8
6.7
3.3
11.0
8.1
9.9
6.6
3.5
19
11
15
-10
17
19
36
30
52
-21
6.2
3.8
6.3
3.8
6.5
3.6
6.7
3.4
6.5
3.5
-16
9
35
-32
1,446
1,493
1,622
1,681
1,741
60
295
7
10
34
6
-18
31
Axis Bank
Quarterly Snapshot
FY11
1Q
Balance Sheet (INR b)
Loans
1,086
Investments
575
Customer Assets
1,181
Deposits
1,475
Borrowings
196
Total Assets
1,895
Deposits Break Up
Retail Deposits
638
% to total Deposits
43
Other Deposits
837
% to total Deposits
57
Deposits Break Up
CASA Deposits
592
% to total Deposits
40
Savings
347
% to total Deposits
24
Current
245
% to total Deposits
17
Term Deposits
882
% to total Deposits
60
Loan Break Up
Agriculture
106
SME Loans
168
Retail Loans
211
of which
Auto
27
Housing
150
Personal Loans/Credit Card 21
Others
13
Other loans
601
Loan Mix
Agriculture
10
SME Loans
15
Retails
19
Others
55
Ratings Profile
Large and Mid Corp
AAA
9
AA
19
A
46
BBB
23
<BBB and below
3
SME
SME1
2
SME2
15
SME3
60
SME4
13
SME 5-8
9
% change are in bp
16 October 2012
FY12
FY13
Var. (%)
QoQ YoY
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
1,106
619
1,204
1,569
190
1,998
1,235
596
1,329
1,558
256
2,067
1,424
720
1,578
1,892
263
2,427
1,319
753
1,492
1,836
223
2,331
1,401
850
1,614
1,945
268
2,506
1,487
903
1,751
2,087
308
2,693
1,698
932
1,891
2,201
341
2,856
1,711
880
1,951
2,226
341
2,894
1,721
997
1,983
2,356
328
3,027
1
13
2
6
-4
5
23
17
23
21
23
21
679
43
890
57
615
39
944
61
743
39
1,149
61
797
43
1,039
57
875
45
1,070
55
919
44
1,168
56
995
45
1,206
55
1,062
48
1,164
52
1,126
48
1,230
52
29
15
652
42
378
24
274
17
917
58
659
42
391
25
268
17
899
58
778
41
409
22
369
20
1,115
59
744
41
429
23
315
17
1,092
59
821
42
468
24
354
18
1,123
58
868
42
473
23
395
19
1,219
58
914
42
517
23
398
18
1,287
58
869
39
528
24
342
15
1,357
61
955
41
562
24
394
17
1,401
59
10
16
20
15
11
25
91
168
210
108
171
252
173
214
278
147
198
270
106
208
293
107
207
333
173
238
376
157
220
406
122
236
443
-23
7
9
14
14
51
27
153
21
8
637
28
169
45
10
705
31
189
44
14
759
35
203
16
16
703
38
223
18
15
794
43
249
20
20
841
49
282
30
15
911
53
304
32
16
929
58
328
40
18
921
8
15
19
58
9
14
20
57
12
15
19
53
11
15
20
53
8
15
21
57
7
14
22
57
10
14
22
54
9
13
24
54
7
14
26
53
8
22
44
23
3
8
24
41
25
2
7
25
43
23
2
8
26
41
23
2
7
24
42
24
3
6
23
41
27
3
8
19
40
30
3
6
18
40
33
3
7
16
39
34
4
2
17
60
12
9
2
17
59
12
10
5
18
59
11
7
5
20
55
12
8
5
18
56
13
8
6
18
55
12
9
5
18
57
12
8
5
5
18
18
57
59
12
10
8
8
Source: Company, MOSL
9
51
8
47
23 127
9
21
-1
16
Axis Bank
Stock Info
EPS: MOSL forecast v/s consensus (INR)
FY13
FY14
MOSL
Forecast
114.0
131.2
Consensus
Forecast
115.4
135.9
Jun-12
Sep-11
Promoter
37.3
37.3
37.2
Domestic Inst
13.1
13.9
7.0
Foreign
42.0
36.1
42.9
Others
7.7
12.8
12.9
16 October 2012
10
Axis Bank
16 October 2012
11
Axis Bank
16 October 2012
12
Axis Bank
N O T E S
16 October 2012
13
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Axis Bank
No
No
No
No
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