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Buy Axis Bank; target of Rs 750: Motilal Oswal

10 September, 2018 9:04 AM
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Buy Axis Bank; target of Rs 750: Motilal Oswal

Motilal Oswal is bullish on Axis Bank has recommended Buy rating on the stock with a target price of Rs 750 in its research report dated September 09, 2018.

RBI approves appointment of Mr. Amitabh Chaudh ry as MD & CEO of Axis Bank for a perio d of 3 years with effect from 1 -Jan -19 up to 31- Dec -21. Mr. Chaudh ry’s term will thus begin after Ms. Shikha Sharma, the current CEO demits office on 31 -Dec -18. It’s going to be a second consecutive time that Axis Bank’s MD & CEO will come from a life insurance company.

AXSB’s stock has delivered 23% return in past two months in anticipation of this management change and also aided by the early signs of recovery in NPL cycle. With management overhang done away with and improving outlook on fresh slippages/credit cost, we expect earnings to start normalizing 2HFY19 onward. AXSB has already increased the PCR to 69% (NCLT-1 provisions of 83%), which will further curb incremental provisioning requirement. We revise our PT to INR750 (SOTP basis) as we roll forward our valuations even as we keep our target multiple unchanged at 2.5x Sep-20E ABV for standalone bank. Maintain Buy.


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