Axis Bank (Update) : Strong earnings visibility. Maintain BUY

Key highlights from our Axis Bank’s (AXSB) management meet are (1) Gross impaired asset additions expected to increase QoQ; however maintained its guidance of Rs 65bn for FY15 (2) Exposure to leveraged companies have declined gradually to form ~7% of total loans vs. 10% over the trailing five quarters (3) 60% of power exposures to be operational in FY15 and rest 40% expected to be operational over FY16-17 (4) NIM to remain healthy in a tight band with a focus on high yield loans. Base rate cut to be in smaller quantum (5) In FY16, Retail traction to be higher vs. SME & Corporate segments; overall loans expected to grow at 18-20%. Upgrade net earnings by ~3-5% for FY16-17E. Maintain BUY. Revise TP to Rs 630 (2.5x FY17E).

(Login to download report)