Express Idea: IndusInd Bank
BUY: CMP Rs453, Target Rs495, Upside 9.3%
– Loan growth to trough soon
– Robust NIM and fee growth to accommodate branch investments
– Asset quality strong except for the CV portfliio
– Profitability to stay intact; earnings growth to be robust
Axis Bank Ltd – Call Update
Reco Price Rs 1,177, Previous Target Price Rs 1,428, New Target Price Rs 1,550
We had recommended a BUY on Axis Bank in Q3 FY14 result update released on January 17, 2014, with a target price of Rs1,428. The stock breached the target in today’s trading session registering 21.3% return from our recommended price of Rs1,177. As we remain positive on Axis Bank and anticipate incremental valuation recovery, we advise investors to hold the stock with an ehnanced 9-12 month price target of Rs1,550. Driven by robust NIMs and productivity improvements, Axis Bank is estimated to deliver resilient RoA of 1.6-1.7% over FY13-16. Current inexpensive valuation (1.4x FY16E P/ABV) and high capitalization level (Tier-1 at 11.5% excluding 9m FY14 profits) provides comfort against the perceived asset quality risks.
BPCL – Call Update
Reco Price Rs345, Previous Target Price Rs420, New Target Price Rs450
We had recommended a BUY on BPCL in Q2 FY14 result update released on November 18, 2013, with a target price of Rs420. We maintained our rating and target in the Q3 FY14 result update released on February 13, 2014. The stock breached the target in today’s trading session registering 21.7% return from our recommended price of Rs345. As we remain positive on BPCL, we advise investors to hold the stock with an ehnanced 9-12 month price target of Rs450. While BPCL continues to remain the best OMC in terms of financial and operational performance, its upstream portfolio has gained strength with recent upgrade in reserve estimates for the Mozambique block.
Maruti Suzuki – Call Update
Reco price Rs1,563, Previous target price Rs1,808, New target price Rs1,930
We had recommended a BUY on Maruti Suzuki with a target price of Rs1,808 on January 29, 2014. The stock hit the target in today’s trading session thus registering 15.7% return. We remain positive on the company and advise investors to remain invested in the stock with a revised price target of Rs1,930.