The festive season was better than expected; provisions higher than peers despite similar trends; TP raised to Rs 700; ‘Buy’ maintained

                             

We hosted Amitabh Chaudhry (MD & CEO), Puneet Sharma (CFO) & Abhijit Majumdar (Head-IR) for investor calls. Mgt. highlighted that overall trends are improving & festive season went better than expectations of Oct. While quality of portfolio is faring in line with leading peers, Axis has higher buffer-provisions. RBI’s actions with DBS-LVB & new banks can raise competition; it may allow simpler transaction with Max and need to merge NBFC subs., but clarity awaited.

Recent RBI’s action indicates more competition: Mgt. highlighted that a combination of allowing DBS to acquire local bank (LVB) & RBI committee’s recommendations to allow more banks (conversion of NBFCs to bank or giving bank-licence to corporates) indicate towards increased competition in the sector. Hence, banks like Axis will need to continue investing in platforms and network.