Axis Bank

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AXIS BANK

BANKING SECTOR

PROFILE – EQUITY RESEARCH


SUBMITTED BY – SOURABH SUNIL GARADE
EMAIL ID – [email protected]
Badhti Ka Naam Zindagi..!
• Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid-Corporates, MSME,
Agriculture and Retail Businesses.
• The Bank has a large footprint of 4,528 domestic branches (including extension counters)
with 12,044 ATMs & 5,433 cash recyclers spread across the country as on 31st March, 2020.
The overseas operations of the Bank are spread over eleven international offices with
branches at Singapore, Hong Kong, Dubai (at the DIFC), Colombo, Shanghai and Gift City-IBU;
representative offices at Dhaka, Dubai, Abu Dhabi, Sharjah and an overseas subsidiary at
London, UK. The international offices focus on corporate lending, trade finance, syndication,
investment banking and liability businesses.
• Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India
(SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General
Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India
Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance
Company Ltd. The share holding of Unit Trust of India was subsequently transferred to SUUTI,
an entity established in 2003.
• With a balance sheet size of Rs. 9,15,165 crores as on 31st March 2020, Axis Bank has
achieved consistent growth and with a 5 year CAGR (2014-15 to 2019-20) of 15% each in Total
Assets, Deposits and Advances.
MANAGEMENT
PRODUCTS
PRODUCTS
STRENGTHS WEAKNESSES
• Effectively using its capital to • Negative Breakdown Second
generate profit - RoCE Support (LTP < S2)
improving in last 2 years •  MFs decreased their
•  Growth in Net Profit with
shareholding last quarter
increasing Profit Margin (QoQ)
•  Increasing Revenue every
•  Decline in Quarterly Net
Quarter for the past 4 Quarters Profit (YoY)
•  Company with Zero Promoter •  Decline in Quarterly Net
Pledge Profit with falling Profit
•  FII / FPI or Institutions Margin (YoY)
increasing their shareholding •  Companies with High Debt
•  Promoter decreasing their
shareholding
OPPORTUNITIES •  Major fall in TTM Net Profit
• Brokers upgraded
recommendation or target
price in the past three THREATS
months • Recent Broker Downgrades in Reco or
•  Turnaround companies- Target Price
loss to profit QoQ •  Company with negative growth and
promoters decreasing shareholding
•  Decrease in Provision in •  Stocks with high PE (PE > 40)
recent results •  Increase in NPA in Recent Results
SHAREHOLDING PATTERN

BALANCE SHEET
INCOME STATEMENT

CASH FLOW STATEMENT


FINANCIAL METRICS AND ROI
PRICE ACTION

5 YEAR CHART

1 YEAR CHART
PEER COMPARISON
PEER BRIEF
TECHNICAL ANALYSIS WITH INDICATIONS ( SHORT TERM)
EMPLOYMENT DETAILS
HIRING MANAGERS
SR NO. NAME OF HIRING MANAGER JOB DESCRIPTION
1 Krishan Mohan Srivastava HR Manager at Axis Bank
2 Sejal Shah Dholekar HR at Axis Bank

3 Max Knj HR Operations executive at Axis


Bank
4 Siddhesh S. Human Resource- Talent
Acquisition
5 Shanu Panchal Deputy manager HR at Axis Bank

EMPLOYEE DISTRIBUTION
EMPLOYMENT DETAILS
TOTAL EMPLOYEE COUNT

NEW HIRES
IMPACT OF COVID-19
• The pandemic is impacting the financial services sector in multiple ways — from business
continuity issues and operational considerations to the overall financial outlook. As financial
services companies are mobilizing and taking steps to minimize these impacts, they will likely
face short- & long-term implications on both profitabilities as well as balance sheet items.
• Amid the highly uncertain situation due to the pandemic, financial institutions need to stress
test their portfolios, for each of the defined scenarios, to better understand the impact. The
current economic and market environment warrants additional stress testing that will have
direct implications for decisions that these financial institutions make in real time. Identifying
sectors/regions/clients that are most at risk and re-evaluating the loan loss provisions under
different economic scenarios will be essential.
• A continued spread of the pandemic and its aftermath will significantly slow down business,
hence financial institutions must take additional measures to ensure business continuity to
continue to remain relevant to their customers. Banks and financial institutions must prepare
for scenarios that might occur post the lockdown period as well. This would be essential in
developing a flexible contingency plan that best equips the banks for crisis management and
provides supportive solutions to its customers.
• The current challenges are likely to translate into high capital infusion requirements for the FIs
to maintain both regulatory capital as well as growth capital.
While the long-term implications of the pandemic for the Indian financial services sector is
unknown, when normalcy returns, banks, and NBFCs will likely have learned a few lessons.
These may include how to best retain operational resilience when confronted with future
pandemics, and possibly how to redesign new operating models such as alternate work
arrangements and innovative ways to interact with customers in a remote set-up. Furthermore,
the pandemic may further accelerate migration to infrastructure of the future – digital
channels and connectivity.
RECOMMENDATION

• Recently, Axis Bank declared their Q1 results of the FY21. The


profit fell 19% YoY to Rs. 1112 Crore as provisions jump 16% YoY.
• Axis bank share showed Rs. 760 High on 12th February this year,
followed by a huge plunge in the price in the coming weeks,
resulting in the low of Rs. 286 on 25th March
• The downtrend cost for around 62% loss.
• After the downtrend, the stock has tried to make an uptrend several
times, but is facing a strong resistance at the 480-485 price level. The
stock has rebounded back as many as 3 times from that price level.
• So, my recommendation is that investors should look for 480-485
levels again and if the stock breaks this resistance, then buying can
be done without any hesitation.
• If the stock breaks the resistance, the target price can be Rs. 536,
which is the 200- days exponential moving average.
• The stop loss should be kept at 430-435 level, as it is the 50- days
and 21- days exponential moving average

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