Quarterly Result Update

Axis Bank Ltd.

Going Strong
Outlook
Beating street estimates, Axis Bank delivered strong profits of Rs 1,555 crore (up 22% YoY) on the back of higher
interest, strong other income and improved cost to income ratio. The NIM expansion to 3.7% (+15 bps YoY) though
was above expectations is a one off due to the FPO funds and is expected to water down in FY14.
With the management guidance of NIM to stay in the 3.25% - 3.50% range in FY14, coupled with loan restructuring
and the expected 25 bps rate cut by the central bank on May 3, we recommend a HOLD on the stock. At a CMP of
Rs 1,503, the stock is trading at 1.9x and 1.5x, its estimated P/BV for FY14E and FY15E.

Key Takeaways

Q4FY13 net profit grew by 22% YoY to Rs 1,555 crore, aided by higher interest as well as other income. NII
increased by 24% YoY to Rs 2,665 crore in Q4FY13 from Rs 2,146 crore in Q4FY12. This was primarily driven
by healthy growth in NIM to 3.7% YoY in Q4FY13 from 3.6%. Other income rose 26% YoY to Rs 2,007 crore in
Q4FY13 with trading income up 63% YoY to Rs 238 crore.

Recommendation (Rs)
CMP
Rating

1,503
HOLD

Index Details
Sensex
Nifty
Industry

19,407
5,916
Banks

Scrip Details
Mkt Cap (Rs cr)
Eq Shares O/s (Cr)
Avg Vol (Lakhs)
52 Week H/L
Dividend Yield (%)
Face Value (Rs)

70,399
46.8
2.4
1519/922
1.1
10.0

Rs. Crore
3,000.00

8.0%
7.0%

2,500.00

6.0%

2,000.00

5.0%
(%)

4.0%

1,500.00

3.0%

1,000.00

2.0%
1.0%

500.00

0.0%

0.00

-1.0%
Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
NII

Latest shareholding pattern (%)

Promoters
33.9
Indian Institutions
8.5
FIIs
40.9
Public
16.6
Total
100.0

NII Growth (RHS)

Stock performance (%)

1m
3m
Axis Bank
14.6
8.6
Nifty
5.0
-2.6
BSE - Bank 13.8
-0.1

6m
21.4
3.7
9.0

Cost - income ratio of the bank reduced to 40% YoY in Q4FY13 from 45%.

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Thursday, 25 April, 2013

.

Quarterly Result Update

(%)
46.0%
45.0%
44.0%
43.0%
42.0%
41.0%
40.0%
39.0%
38.0%
37.0%

8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
Cost to Income

NIM (RHS)

Cost of Funds (RHS)

In Q4FY13, Axis Bank witnessed a healthy growth in advances and deposits with the total advances up by 16%
YoY to Rs 1,96,966 crore in Q4FY13, largely driven by a strong growth in retail loans. Retail advances grew
44% YoY to Rs 53,960 crore in Q4FY13 and accounted for 27% of net advances. The management expects
the retail portfolio to be 30% of the total loans by FY14. Non-retail loans on the other hand have recorded an
increase of 8% YoY, in which the SME segment has shown a healthy growth of 26% YoY and stood at Rs
29,922 crore.
300,000

Rs. Crore

250,000
200,000
150,000
100,000
50,000
Q3FY12

Q4FY12

Q1FY13

Advances

Q2FY13

Q3FY13

Q4FY13

Deposits

Total deposits grew by 14.8% YoY to Rs 2,52,614 crore in FY13 while the bank's total assets grew by 19.2%
YoY to Rs 3,40,561 crore in FY13. Share of CASA deposits grew 23% YoY to Rs 112,100 crore in Q4FY13,
which contributed to 36% of total deposits. Retail term deposits grew 24% YoY to Rs 59,531 crore and
comprise 42% of total term deposits.

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Thursday, 25 April, 2013

Quarterly Result Update

300,000

45.00%
44.00%

250,000
Rs '000 Crore

43.00%
42.00%

200,000

41.00%

150,000

40.00%

100,000

39.00%
38.00%

50,000

37.00%
36.00%

Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13

Deposits

CASA (RHS)

GNPA ratio rose by 12 bps YoY to 1.06% in Q4FY13 as against 0.94% whereas NNPA ratio rose marginally by
7 bps YoY to 0.32%. Provision coverage declined to 79% in Q4FY13, which included prudential write-offs. The
bank made a contingency provision of Rs 375 crore for the additional loan accounts that show some stress on
repayments. Restructured assets stood at Rs 791 crore during Q4FY13.
1.2%

(%)

82.0%
81.0%

1.0%

80.0%
79.0%

0.8%

78.0%
0.6%

77.0%
76.0%

0.4%

75.0%
74.0%

0.2%

73.0%
0.0%

72.0%
Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
Net NPA

Gross NPA

Provision Coverage Ratio (RHS)

RoA and RoE were at 1.94% and 21.6% respectively in Q4FY13 whereas capital adequacy ratio stood at 17%
with Tier 1 at 12.2%.

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Thursday, 25 April, 2013

Quarterly Result Update

18.00

(%)
15.17

16.00
14.00
12.00

13.66
11.40

13.51

13.92

17.00

11.80
12.23

10.00
8.00
6.00

9.45
8.50

8.30

9.49

9.92

10.27

4.00
2.00
0.00
Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13
Capital Adequacy Ratio

Tier I

Axis announced a dividend of Rs 18 per equity share of paid up value of Rs 10/-.

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Thursday, 25 April, 2013

Quarterly Result Update

Description
Q4FY13
Interest Earned
7047.6
Interest on Advances
4898.8
% of Total Int. Earned
69.5
Interest on Balances with RBI
41.7
% of Total Int. Earned
0.6
Income From Investments
2029.7
% of Total Int. Earned
28.8
Others
77.4
% of Total Int. Earned
1.1
Other Income
2007.2
Total Income
9054.7
Interest Expended
4382.9
Operating Expenses
1872.1
Payment to provisions for Employee 601.4
% of Opt. Expenses
32.1
Other Opt. Expenses
1270.7
% of Opt. Expenses
67.9
Total Expenses
1872.1
Operating Profit before prov. & cont. 2799.7
% of Total Int. Earned
39.7
Provisions and Contigencies
595.4
PBT
2204.4
% of Total Int. Earned
31.3
Tax
649.2
PAT
1555.2
% of Total Int. Earned
22.1
Paid up equity share capital
468.0
EPS (Rs.)
33.2
Capital Adequacy Ratio
17.0
NII
2664.7
NIM
0.0
Gross NPA
2393.4
% of Gross NPA
1.1
Net NPA
704.1
% of Net NPA
0.3
ROA(%)
0.5

Q4FY12
6060.3
4257.9
70.3
23.9
0.4
1737.6
28.7
41.0
0.7
1587.6
7647.9
3914.2
1696.2
529.6
31.2
1166.6
68.8
1696.2
2037.6
33.6
139.3
1898.3
31.3
621.0
1277.3
21.1
413.2
30.9
13.7
2146.1
0.0
1806.3
0.9
472.6
0.3
0.5

% Chg.
16.3
15.1
74.4
16.8
88.7
26.4
18.4
12.0
10.4
13.6
8.9
10.4
37.4
327.4
16.1
4.5
21.8
13.3
7.5
334.0
24.2
0.0
32.5
12.0
49.0
7.0
1.0

Q4FY13
7047.6
4898.8
69.5
41.7
0.6
2029.7
28.8
77.4
1.1
2007.2
9054.7
4382.9
1872.1
601.4
32.1
1270.7
67.9
1872.1
2799.7
39.7
595.4
2204.4
31.3
649.2
1555.2
22.1
468.0
33.2
17.0
2664.7
0.0
2393.4
1.1
704.1
0.3
0.5

Q3FY13
6964.9
4906.7
70.4
24.7
0.4
2014.3
28.9
19.3
0.3
1615.4
8580.3
4470.1
1748.7
615.1
35.2
1133.6
64.8
1748.7
2361.5
33.9
386.8
1974.7
28.4
627.5
1347.2
19.3
427.2
31.5
13.7
2494.8
0.0
2275.3
1.1
678.7
0.3
0.4

% Chg. FY201303 FY201203

1.2
27182.6
21994.7
-0.2
19166.2
15379.4
70.5
69.9
68.8
111.3
98.4
0.4
0.4
0.8
7747.0
6394.3
28.5
29.1
301.0
158.1
122.6
0.6
0.6
24.3
6551.1
5420.2
5.5
33733.7
27414.9
-2.0
17516.3
13976.9
7.1
6914.2
6007.1
-2.2
2377.0
2080.2
34.4
34.6
12.1
4537.3
3926.9
65.6
65.4
7.1
6914.2
6007.1
18.6
9303.1
7430.9
34.2
33.8
53.9
1750.4
1143.0
11.6
7552.7
6287.8
27.8
28.6
3.5
2373.3
2045.6
15.4
5179.4
4242.2
19.1
19.3
9.6
468.0
413.2
5.4
110.7
102.7
330.0
17.0
13.7
6.8
9666.3
8017.8
0.0
0.0
0.0
5.2
2393.4
1806.3
0.0
1.1
0.9
3.7
704.1
472.6
0.0
0.3
0.3
10.0
0.0
0.0

% Chg.
23.6
24.6
13.0
21.2
29.0
20.9
23.0
25.3
15.1
14.3
15.5
15.1
25.2
53.1
20.1
16.0
22.1
13.3
7.8
334.0
20.6
0.0
32.5
12.0
49.0
7.0
-

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Thursday, 25 April, 2013

Quarterly Result Update

P/E Bands

P/B Bands

Nifty Comparison

3500

3000

160

3000

2500

140

2000

120

1500

100

1000

80

2500
2000
1500
1000

60

500

500
0
Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14
CMP

7X

9.28X

11.56X

13.84X

0
Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-14

16.12X

CMP

1.3X

BSE-Bankex Comparison

1.63X

1.96X

2.29X

2.62X

40
Apr-12 Jun-12 Aug-12 Oct-12 Dec-12
Axis Bank

Feb-13

NIFTY

Rating

160.0
22
EXPECTED 2YR BV CAGR%

140.0
120.0
100.0
80.0
60.0
40.0
Apr-12

Jun-12 Aug-12 Oct-12

Dec-12

Feb-13

AXIS
Indusind
HDFC BANK

18

KOTAK
14

SBI
HDFC
BOB
ICICI BANK

BANKEX

PNB

10
1.0

Axis Bank

IDFC

2.0

3.0

4.0

5.0

6.0

RATING SCORE

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Thursday, 25 April, 2013

Quarterly Result Update

Ventura Securities Limited

Corporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai 400079
This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no
responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their
articles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole or
in part without written permission is prohibited. This report is for private circulation.

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Thursday, 25 April, 2013