4QFY2012 Result Update | Banking

April 28, 2012

Axis Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 4QFY12 2,146 2,038 1,277 3QFY12 2,140 2,059 1,102 % chg (qoq) 0.3 (1.1) 15.9 4QFY11 1,701 1,821 1,020 % chg (yoy) 26.2 11.9 25.2

BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 46,306 1.2 1367/785 301,134 10 17,187 5,209 AXBK.BO AXSB@IN

`1,121 `1,587
12 Months

Source: Company, Angel Research

For 4QFY2012, Axis Bank reported healthy 25.2% yoy growth in its net profit to `1,277cr, above our as well as street estimates. Although the NIMs witnessed a sequential decline of 20bp, higher recoveries and upgrades led to lower provisioning expenses resulting in a healthy bottom-line. NIMs decline on priority sector lending; higher recoveries improve NPA levels: The banks loan book grew by a healthy 19.2% yoy (up 14.1% qoq), while deposits grew by 16.3% yoy (up 5.5% qoq). On a qoq basis, the growth in loan book was primarily on account of higher agri lending (up 62.1% qoq) and SME lending (up 15.0% qoq). Savings deposits growth was strong at 9.2% qoq (up a healthy 26.5% yoy). On a daily average basis, saving account deposits grew by 20.2% yoy, while current account deposits increased by 28.9% yoy. The banks reported NIM for the quarter declined by 20bp qoq on account of higher priority sector lending (62.1% qoq growth) and lower investment yields. Fee income picked up in 4QFY2012 on account of healthy loan growth in agri, SME and retail segments. The slippages for the bank for 4QFY2012 remained at average levels (`514cr compared to `535cr in 3QFY2012 and `496cr in 2QFY2012), however sharp rise in recoveries and upgrades (`593cr compared to quarterly average of `125cr since 1QFY2011), led to lower sequential gross NPA levels (down 5.7% qoq) for the bank. Further, the bank improved its provisioning coverage ratio to 81.0% from 75.8% in 3QFY2012, leading to significant decline of 30.8% qoq in net NPA levels to `4,726cr. Outlook and valuation: Axis Bank is trading at 1.5x FY2014E ABV 52% discount to HDFC Bank vs. an average discount of 32.9% since July 2006. We remain positive on the bank, owing to its attractive CASA franchise, multiple sources of sustainable fee income, strong growth outlook and A-list management. We maintain our Buy recommendation on the stock with a target price of `1,587.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 37.4 13.4 41.8 7.5

Abs. (%) Sensex Axis Bank

3m (0.3) 4.2

1yr (10.9) (16.0)

3yr 56.2 111.2

Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2011 6,563 31.1 3,388 34.8 3.2 82.5 13.6 2.4 1.6 19.3

FY2012 8,018 22.2 4,242 25.2 3.1 102.7 10.9 2.0 1.6 20.3

FY2013E 9,807 22.3 4,969 17.1 3.2 116.4 9.6 1.8 1.6 20.0

FY2014E 11,982 22.2 5,939 19.5 3.2 139.1 8.1 1.5 1.5 20.3

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

Axis Bank | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 performance summary

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Other Provisions PBT Provision for Tax PAT
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 6,060 4,258 1,738 24 41 3,914 2,146 1,588 1,442 1,327 146 115 3,734 1,696 530 1,167 2,038 139 127 12 1,898 621 1,277 5,777 3,964 1,775 15 23 3,637 2,140 1,430 1,312 1,223 118 90 3,570 1,511 542 969 2,059 422 334 88 1,637 535 1,102 4.9 7.4 (2.1) 54.4 80.7 7.6 0.3 11.0 9.9 8.5 24.1 28.2 4.6 12.3 (2.3) 20.4 (1.1) (67.0) (62.0) (86.1) 16.0 16.2 15.9 4,367 3,063 1,213 64 27 2,666 1,701 1,450 1,392 1,231 58 161 3,151 1,331 396 935 1,821 254 97 157 1,566 546 1,020 38.8 39.0 43.2 (62.4) 49.8 46.8 26.2 9.5 3.5 7.8 151.8 (28.8) 18.5 27.5 33.7 24.8 11.9 (45.2) 30.9 (92.2) 21.2 13.7 25.2

Exhibit 2: 4QFY2012 Actual vs. Angel estimates

Particulars (` cr) Net interest income Other income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 2,146 1,588 3,734 1,696 2,038 139 1,898 621 1,277

Estimates 2,252 1,586 3,838 1,602 2,236 521 1,715 556 1,159

Var. (%) (4.7) 0.1 (2.7) 5.9 (8.9) (73.3) 10.7 11.7 10.2

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Exhibit 3: 4QFY2012 performance analysis

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of funds Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA provision to avg. assets (%)
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 169,760 148,739 220,104 208,693 77.1 39,754 51,668 91,422 41.5 13.7 9.5 6.5 3.6 45.4 1,806 0.9 473 0.3 81.0 1.4 0.2 71.3 39,459 47,297 86,756 41.6 11.8 8.3 6.3 3.8 42.3 1,914 1.1 683 0.4 75.3 1.5 0.5 14.1 142,408 5.5 189,238 586bp 0.7 9.2 5.4 (4)bp 188bp 120bp 11bp (20)bp 311bp (5.7) (16)bp (30.8) (14)bp 572bp (6)bp (33)bp 75.3 36,917 40,850 77,767 41.1 12.7 9.4 5.6 3.4 42.2 1,599 1.0 410 0.3 80.9 1.0 0.2 19.2 16.3 187bp 7.7 26.5 17.6 44bp 101bp 4bp 89bp 11bp 321bp 12.9 (7)bp 15.2 (1)bp 10bp 49bp 1bp

Balance sheet growth healthy

The banks loan book grew by a healthy 19.2% yoy (up 14.1% qoq), while deposits grew by 16.3% yoy (up 5.5% qoq). On a qoq basis, the growth in loan book was primarily on account of higher agri lending (up 62.1% qoq) and SME lending (up 15.0% qoq). The growth in retail portfolio was also strong at 12.9% qoq, driven by strong growth in home loan advances. Growth in the large and mid-corporate segment, though moderated from the previous quarters, remained reasonably healthy at 5.9% qoq (19.2% yoy). The banks exposure to large and mid-corporate borrowers rated below-A had risen from 27% in 2QFY2012 to 30% in 3QFY2012 and has further risen to 33% as of 4QFY2012. The management has guided for a above sytem-average loan growth during FY2013, with primary focus on retail lending (home ,auto and possibly unsecured lending) and sme and agri lending (better opportunities and to meet priority sector lending targets).

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Exhibit 4: Strong sequential growth in agri loans

Particulars (` cr) Corporate SME Agri Retail - Housing - Auto - Others Total advances 4QFY12 91,054 23,796 17,340 37,570 28,178 4,884 4,508 169,760 3QFY12 84,083 20,692 10,700 33,264 25,281 4,324 3,659 148,739 % chg (qoq) 8.3 15.0 62.1 12.9 11.5 12.9 23.2 14.1 4QFY11 75,923 21,406 17,320 27,759 18,599 3,053 6,107 142,408 % chg (yoy) 19.9 11.2 0.1 35.3 51.5 60.0 (26.2) 19.2 % to total 53.6 14.0 10.2 22.1 16.6 2.9 2.7 100.0

Source: Company, Angel Research

Deposit accretion sustained the traction gained in 3QFY2012 into 4QFY2012 as well, with rise of 5.5% qoq. Savings deposits growth was strong at 9.2% qoq (up a healthy 26.5% yoy). On a daily average basis, saving account deposits grew by 20.2% yoy, while current account deposits increased by 28.9% yoy. Period-end CASA ratio remained largely steady around the 42% mark. The bank has been focussing on building a stronger retail term deposits portfolio, as evident from the 43.1% yoy growth in this deposit franchise. As of 4QFY2012, retail term deposits now constitute 37.2% ( 30.0% as of 4QFY2012) of total term deposits. The bank is expected to continue focussing on building its retail franchise including low cost deposits in FY2013 as well.

Exhibit 5: Average CASA growth picks up in 4QFY12

30 25 20 15 10 5 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 Reported yoy growth in average CASA balances (%) 23 20 20 13 24

Exhibit 6: Period-end CASA ratio remains stable

(%) 43.0 41.1 41.0 42.2 41.6 40.5 41.5

39.0

37.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

Source: Company, Angel Research

NIMs decline on priority sector lending

The banks reported NIM for the quarter declined by 20bp qoq on account of higher priority sector lending (62.1% qoq growth) and lower investment yields. The banks yields on foreign loan book were higher by 25-50bp than average in FY2012 on account of higher pricing power due to the tight liquidity environment prevailing globally. However, the management expects these NIMs to decline back to average levels of 1.0-1.2% in FY2013. The management has guided for overall NIMs for 1QFY2013 to be in the band of 3.3-3.5%.

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Exhibit 7: Cost of funds rise in 4QFY12...

(%) 6.5 5.56 5.5 4.5 3.5 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 6.13 6.19 6.34 6.45

Exhibit 8: ...leading to 20bp dip in NIMs

(%) 3.9 3.6 3.3 3.0 2.7 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 3.44 3.28 3.78 3.75 3.55

Source: Company, Angel Research

Source: Company, Angel Research

Fee income picks up in 4QFY2012

Fee income picked up in 4QFY2012 on account of healthy loan growth in agri, SME and retail segments. Growth in agri and SME segment was strong at 77.3% qoq, while fees from retail segment grew by 14.2% qoq, driven by 40.8% qoq growth in third-party products. The treasury (including DCM) and trading profits were also healthy for 4QFY2012 growing by 7.3% qoq and 24.1% qoq, respectively. The corporate based fee income for the bank has been sluggish in FY2012 (decline of 6.6% qoq and up only a muted 0.9% yoy), mostly due to weak macro environment which has slowed down corporate activities. The management expects the corporate fee income to remain subdued in FY2013 as well and see growth picking up only post further easing of macro headwinds. The management has however guided for fee income in line with balance sheet growth in FY2013, driven by higher fee income from retail and SME segments.

Exhibit 9: Fee income up sequentially on back of healthy qoq loan growth

Particulars (` cr) Fee Income Corporate Treasury Agri & SME Business banking Capital markets Retail - Third-Party Products - Cards, Retail Forex & Remittance - Other Retail Trading profit Others Other income Other income excl. Treasury
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 1,327 442 249 117 128 13 377 138 117 122 146 115 1,588 1,442 1,223 473 232 66 109 13 330 98 111 121 118 90 1,430 1,312 8.5 (6.6) 7.3 77.3 17.4 14.2 40.8 5.4 0.8 24.1 28.2 11.0 9.9 1,231 438 255 100 107 19 312 103 85 124 58 161 1,450 1,392 7.8 0.9 (2.4) 17.0 19.6 (31.6) 20.8 34.0 37.6 (1.6) 151.8 (28.8) 9.5 3.5

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Higher recoveries and upgrades lead to qoq decline in NPA levels

The bank surprised positively on asset quality with provision expenses declining by 45.2% yoy (down 67.0% qoq) to `139cr. The bank reversed provisions of `102cr (made on account of investment depreciation) during the quarter. The slippages for the bank for 4QFY2012 remained at average levels (`514cr compared to `535cr in 3QFY2012 and `496cr in 2QFY2012), however sharp rise in recoveries and upgrades (`593cr compared to quarterly average of `125cr since 1QFY2011), led to lower sequential gross NPA levels (down 5.7% qoq) for the bank. Further, the bank improved its provisioning coverage ratio to 81.0% from 75.8% in 3QFY2012, leading to significant decline of 30.8% qoq in net NPA levels to `4,726cr. The bank restructured loans worth ~`588cr, higher than the `295cr restructured during 3QFY2012. The outstanding restructured book as 4QFY2012 for the bank stands at `3,060cr.

Exhibit 10: Slippages remain stable sequentially

(%) 1.60 1.20 0.80 0.40 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 0.95 1.39 1.50 1.44

Exhibit 11: NPA levels decline sequentially

Gross NPAs (%) 1.3 1.0 80.9 80.0 Net NPAs (%) 77.7 NPA coverage (%, RHS) 81.0 75.3 85.0 77.5 70.0 62.5

0.83

0.8 0.5

1.0 0.3

1.1 0.3

1.1 0.3

1.1 0.4

0.9 0.3
55.0 4QFY12

0.3 -

4QFY11

1QFY12

2QFY12

3QFY12

Source: Company, Angel Research

Source: Company, Angel Research; Note: PCR including tech. write-offs

Exhibit 12: Network expansion continues steadily

Branches 2,000 1,600 6,270 1,200 6,871 7,594 8,324 ATMs (RHS) 9,924 12,500 10,000 7,500 5,000

Exhibit 13: Cost-to-income ratio rises above 45%

Opex to avg. assets (%) 2.5 2.4 2.3 2.2 2.1 2.0 2.4 2.2 2.4 2.3 2.4 38.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12
Source: Company, Angel Research
42.2
46.1

CIR (%, RHS)

45.4

47.0

45.2 42.3

44.0

1,390

1,411

1,446

1,493

1,622

800 400

41.0

2,500 -

4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research;

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Capital adequacy comfortable for now

The banks capital adequacy as of 4QFY2012 stands at a comfortable 13.7% with tier-I ratio of 9.5%. The bank is not looking at any immediate capital raising plans and would assess the need for capital requirements in the latter half of the year.

Investment arguments
Branch expansion to support faster market share gains
We believe Axis Banks reasonable capital adequacy positions it for market share gains with ~500bp higher growth than industry over FY201214. The bank has expanded its network at a 31.6% CAGR since FY200312, driving a four-fold increase in its CASA market share to 4.3% by FY2011. In our view, such gains will continue going forward as well, especially as network expansion (250+ additions, about 2025% yoy) remains strong.

Fee income continues to drive higher RoEs

Axis Banks fee income contribution across a spectrum of services has been a meaningful 1.9-2.0% of assets (almost twice the level in PSBs) over FY200912. Going forward, fee income growth is likely to at least mirror balance sheet growth. We have built in a 20.2% CAGR over FY201214) in fee income, leading to sustained contribution of 1.9% of assets for FY2013 and FY2014.

Book-accretive dilution on the cards in the next 1218 months

Axis Bank's tier-I capital adequacy has dipped to 9.5% as of FY2012 from 11.2% in FY2010 due to strong credit growth. Going forward also, we expect management to meet its guidance for healthy growth of ~1.3x the industrys growth. This is likely to result in a need to raise capital in the next 1218 months, as per our calculations. (Axis Bank had last raised capital in 2QFY2010 when its tier-I CAR was 9.4%). Dilution is likely to be book-accretive and will aid in further enhancing the bank's credit market share going forward.

Outlook and valuation

Axis Banks aggressive branch expansion (at a CAGR of ~30%) over FY200812 is expected to lead to further CASA market share gains for the bank. In FY2011, the bank added over 400 branches (an increase of 41.4% yoy), while in FY2012 the bank added 232 (an increase of 16.7% yoy) branches. These branches are expected to contribute more meaningfully in FY2013 and FY2014 and aid in driving business and profitability growth for the bank. Axis Bank is trading at 1.5x FY2014E ABV 52% discount to HDFC Bank vs. an average discount of 32.9% since July 2006. We remain positive on the bank, owing to its attractive CASA franchise, multiple sources of sustainable fee income, strong growth outlook and A-list management. We maintain our Buy recommendation on the stock with a target price of `1,587.

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Exhibit 14: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Angel Research

Earlier estimates FY2013 22.0 20.0 40.8 3.1 17.1 22.0 22.0 2.2 73.6 FY2014 23.0 23.0 40.8 3.1 18.6 24.0 24.0 2.2 76.2

Revised estimates FY2013 22.0 23.0 40.8 3.2 17.1 22.0 22.0 1.6 80.8 FY2014 23.0 23.0 40.8 3.2 19.3 24.0 24.0 1.5 80.4

Exhibit 15: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2014 Earlier estimates 11,752 7,525 19,277 8,945 10,332 1,766 8,566 2,779 5,787 Revised Var. (%) estimates 11,982 7,574 19,557 9,088 10,469 1,678 8,791 2,852 5,939 2.0 0.7 1.4 1.6 1.3 (5.0) 2.6 2.6 2.6

Earlier estimates 9,812 6,347 16,159 7,214 8,945 1,792 7,154 2,321 4,833

Revised Var. (%) estimates 9,807 6,349 16,157 7,329 8,828 1,473 7,355 2,386 4,969 (0.0) 0.0 (0.0) 1.6 (1.3) (17.8) 2.8 2.8 2.8

Exhibit 16: Angel EPS forecast vs. consensus

Year (`) FY2013E FY2014E Angel forecast 116.4 139.1 Bloomberg consensus 116.0 139.6 Var. (%) 0.3 (0.4)

Source: Bloomberg, Angel Research

April 28, 2012

Axis Bank | 4QFY2012 Result Update

Exhibit 17: P/ABV band

Price (`) 2,500 2,100 1,700 1,300 900 500 100 0.8x 1.4x 2x 2.6x 3.2x

Dec-10

Apr-06

Aug-08

Mar-09

Oct-09

Jul-11

Nov-06

Feb-12
Apr-11

(300)

Source: Company, Angel Research

Exhibit 18: Discount to HDFC Bank (%)

-

Dec-06

Dec-07

Dec-08

Dec-09

May-10

Dec-10

Dec-11

Apr-07

Apr-08

Apr-09

Apr-10

Sep-12
Aug-11 Apr-12

Jun-07
Aug-07

Aug-06

Jan-08

Aug-08

Aug-09

(15.0)

(30.0)

(45.0)

(60.0)
Source: Company, Angel Research

April 28, 2012

Aug-10

(%)

Axis Bank | 4QFY2012 Result Update

Exhibit 19: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Neutral Buy Neutral Buy Buy Accumulate Buy Buy Buy Buy Neutral Buy Buy Buy Accumulate Buy Neutral Buy Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 1,121 417 543 869 24 350 165 115 764 337 51 430 95 410 91 101 213 87 895 242 839 2,131 101 76 219 65 57 Tgt. price (`) 1,587 1,183 470 205 125 943 392 62 532 508 118 117 240 104 296 1,138 2,593 128 266 87 Upside (%) 41.6 36.1 34.3 24.9 8.6 23.4 16.2 21.0 23.6 23.9 29.6 15.2 12.8 19.8 22.7 35.6 21.7 26.9 21.5 33.9 FY2014E P/ABV (x) 1.5 1.0 3.1 1.4 1.0 1.8 0.6 0.7 0.9 0.9 0.6 0.7 0.8 0.6 0.6 0.6 0.7 0.5 0.8 0.5 0.8 1.3 0.6 0.7 0.7 0.5 0.7 FY2014E Tgt P/ABV (x) 2.2 1.9 2.4 0.8 0.8 1.1 1.0 0.8 0.9 0.7 0.7 0.7 0.8 0.7 0.7 1.1 1.6 0.8 0.9 0.7 FY2014E P/E (x) 8.1 7.3 15.3 10.7 6.0 8.4 4.0 4.3 5.0 5.2 3.8 4.5 4.8 3.7 3.6 4.2 4.4 4.1 4.6 4.0 4.7 7.9 3.7 4.0 4.4 3.0 4.9 FY2011-14E EPS CAGR (%) 16.4 13.0 27.0 20.4 6.7 22.5 (2.1) 6.5 12.2 21.3 26.8 10.9 45.7 2.5 6.2 22.7 5.4 29.9 8.8 17.1 8.8 23.6 8.7 7.7 27.2 11.4 14.2 FY2014E RoA (%) 1.5 1.3 1.7 1.5 0.9 1.4 1.0 1.0 1.1 0.8 0.9 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.1 1.0 0.8 0.7 0.8 0.7 0.5 FY2014E RoE (%) 20.3 14.5 22.1 16.0 17.7 23.3 17.0 16.7 19.2 16.5 17.5 16.7 13.8 16.2 16.9 14.8 18.2 13.9 18.6 13.6 18.5 19.1 17.2 16.2 17.4 16.0 13.2

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

April 28, 2012

10

Axis Bank | 4QFY2012 Result Update

Income statement
Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY08 2,585 65.0 1,795 77.7 4,381 70.0 2,155 77.4 2,226 63.4 579 58.2 1,646 65.3 575 35.0 1,071 62.5 FY09 3,686 42.6 2,834 57.8 6,520 48.8 2,858 32.6 3,662 64.5 877 51.3 2,785 69.2 970 34.8 1,815 69.5 FY10 5,004 35.8 3,946 39.2 37.3 3,710 29.8 5,241 43.1 1,389 58.5 3,851 38.3 1,337 34.7 2,515 38.5 FY11 6,563 31.1 4,632 17.4 25.1 4,779 28.8 6,416 22.4 1,280 (7.9) 5,136 33.3 1,747 34.0 3,388 34.8 FY12 8,018 22.2 5,420 17.0 13,438 20.0 6,007 25.7 7,431 15.8 1,143 (10.7) 6,288 22.4 2,046 32.5 4,242 25.2 FY13E 9,807 22.3 6,349 17.1 16,157 20.2 7,329 22.0 8,828 18.8 1,473 28.8 7,355 17.0 2,386 32.4 4,969 17.1 FY14E 11,982 22.2 7,574 19.3 19,557 21.0 9,088 24.0 10,469 18.6 1,678 13.9 8,791 19.5 2,852 32.4 5,939 19.5

8,950 11,195

Balance sheet
Y/E March (` cr) Share Capital Reserve & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY08 358 8,411 49.1 5,624 3,429 4,130 7,306 5,199 33,705 59,661 61.8 923 2,785 49.6 FY09 359 9,855 33.9 10,185 5,334 4,613 9,419 5,598 46,330 36.7 1,073 3,744 34.8 FY10 405 15,639 20.4 10,014 7,156 6,134 9,482 5,722 55,975 27.9 1,222 3,906 22.3 FY11 411 18,588 33.9 19,275 6,993 8,209 13,886 7,522 71,992 36.5 2,273 4,632 34.4 FY12 413 22,395 16.3 22,683 11,389 8,643 10,703 3,231 FY13E 427 26,509 23.0 27,791 13,895 10,609 10,829 3,959 FY14E 427 31,083 23.0 34,029 17,090 12,886 13,320 4,847

87,626 117,374 141,300 189,238 220,104 270,728 332,996

109,578 147,721 180,648 242,713 285,628 349,960 428,512

93,192 117,437 142,688 19.2 2,259 6,483 17.7 22.0 2,685 7,943 22.5 23.0 3,189 9,726 22.4

81,557 104,341 142,408 169,760 207,107 254,741

109,578 147,721 180,648 242,713 285,628 349,960 428,512

April 28, 2012

11

Axis Bank | 4QFY2012 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 2.8 0.6 2.2 0.2 2.4 1.7 4.2 2.4 1.8 0.6 1.2 15.0 17.6 2.9 0.7 2.2 0.2 2.4 2.0 4.4 2.2 2.2 0.8 1.4 13.6 19.1 3.0 0.8 2.2 0.4 2.7 2.0 4.6 2.3 2.3 0.8 1.5 12.5 19.2 3.1 0.6 2.5 0.2 2.7 2.0 4.7 2.3 2.4 0.8 1.6 12.1 19.3 3.0 0.4 2.6 0.1 2.7 1.9 4.7 2.3 2.4 0.8 1.6 12.6 20.3 3.1 0.5 2.6 0.1 2.7 1.9 4.6 2.3 2.3 0.8 1.6 12.8 20.0 3.1 0.4 2.6 0.1 2.7 1.9 4.6 2.3 2.3 0.7 1.5 13.3 20.3 37.4 4.6 0.5 22.2 4.0 0.9 18.1 2.8 1.1 13.6 2.4 1.2 10.9 2.0 1.4 9.6 1.8 2.1 8.1 1.5 2.5 29.9 241.6 6.0 50.6 281.6 10.0 62.1 393.8 12.0 82.5 462.5 14.0 102.7 551.5 16.0 116.4 630.8 23.0 139.1 738.0 27.5 0.8 0.4 1.0 0.4 49.8 1.1 0.4 1.5 0.6 63.6 1.3 0.4 2.2 0.8 68.2 1.1 0.3 1.4 0.5 74.3 1.1 0.3 1.3 0.3 73.8 0.9 0.2 1.6 0.4 80.8 0.7 0.1 1.5 0.3 80.4 45.7 68.1 13.7 10.2 43.1 69.5 13.7 9.3 46.7 73.8 15.8 11.2 41.1 75.3 12.7 9.4 41.5 77.1 14.3 9.6 40.8 76.5 14.1 9.3 40.8 76.5 13.8 8.9 2.9 49.2 1.2 17.6 3.0 43.8 1.4 19.1 3.1 41.4 1.5 19.2 3.2 42.7 1.6 19.3 3.1 44.7 1.6 20.3 3.2 45.4 1.6 20.0 3.2 46.5 1.5 20.3 FY08 FY09 FY10 FY11 FY12 FY13E FY14E

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Axis Bank | 4QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Axis Bank No Yes Yes No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

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