Shares of Axis Bank ended lower by 7% after posting quarterly results, commenting on the same, Amar Ambani, Head of Research, IIFL said, “While growth and margin performance was strong, the key disappointment in Axis Bank’s Q2 FY16 result was significant accretion to impaired assets. Though near-term asset quality outlook is uncertain, the bank is estimated to accelerate earnings growth in coming years on the back of further pick-up in loan growth and an efficiently managed cost metric. On the back of a stable RoA delivery, we see RoE improving towards 20% by FY18. The valuation has corrected to attractive level of 1.7x FY18 P/ABV.”
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