Axis Bank Ltd

Plugging the portfolio gaps while scaling up

1|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 TABLE OF CONTENTS
Summary 3

Valuation & Peer comparison 4

Bull and Bear case scenario 5

Peer valuation 6

Financial analysis & projections 8

Investment highlights 9

Valuation 14

Business Quality score 18

Annual report analysis 19

Key risks and concerns 21

Quarterly financials 21

Financial Statement Analysis & Projections 22

Disclaimer 23

2|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 BUY @ CMP INR 671.0 Target: INR 901.1 in 24 months Upside Potential: 34.3%

Plugging the portfolio gaps while scaling up

Post-acquisition of Citi’s consumer business and a stake in Max life, Axis Bank (Axis) Industry Bank
is now gearing to scale up its business operations by filing the gap in its portfolio,
given that most of the asset quality issues are now behind it and its provision coverage Scrip Details
ratio (FY22 at >70%) has already been shored up. We initiate coverage on Axis with a Face Value (INR) 2.0
BUY, with a PT of INR 901.1 (based on SoTP valuation) over a period of 24 months. Market Cap (INR Cr) 2,06,353
Our conviction stems from the following: Price (INR) 671
No of Shares O/S (Cr) 306.5
 12.5% CAGR of net advances over FY21-24, with retail/SME/corporate 3M Avg Vol (000) 11,547.7
growing at a CAGR of 14.9/15.8/7.4%, respectively. 52W High/Low (INR) 866/631
Dividend Yield (%) 0.0
 Asset quality is expected to improve with GNPA and NNPA forecast to fall
by 138 and 52bps over FY21-24E to 2.3% and 0.5%, respectively, in FY24.
Shareholding (%) Mar,22
 NII is expected to grow at 16.1% CAGR with yields and cost of funds Promoter 9.7
expected at 7.5% and 4.0%, respectively, in FY24. Institution 77.4
Public/Others 12.9
 We have modeled the NIMs to grow by 12bps to 3.7% while other income TOTAL 100.0
is expected to grow at a 6.2% CAGR over the same period.
Price Chart
 PPoP is expected to grow at a 9.9% CAGR over FY21-24. Axis Bank is now
1000
expected to slow down provisioning, given the already high PCR and no
800
major expectation of slippage in asset quality. This should lead to faster
600
growth in PAT (36.0% CAGR) over FY21-24.
400
200
 Expected improvement in return ratios- RoAA to 1.2% (+50bps) & RoAE
to 12.0% (+495bps). 0
Jun-14
Jun-12

Jun-16

Jun-18

We have valued the core domestic operations at 1.0 FY24 P/B while the other Jun-20
verticals, namely insurance, AMC, broking, institutional broking, investment banking,
represent ~5.8% of our target price. We have applied a 20% holding discount while Nifty-LHS Axis Bank
valuing the subsidiary businesses.

Key Financial Data (INR Cr, unless specified)

Interest Ad BVPS RoAA RoAE

NII PPOP Net Profit NIM (%) EPS (INR) P/E (X) P/BV (X)
earned (INR) (%) (%)

FY20 62,635.2 25,206.2 23,438.1 1,627.2 3.3 5.8 267.9 0.2 2.1 116.4 2.2
FY21 63,645.3 29,239.1 25,702.2 6,588.5 3.6 21.5 308.8 0.7 7.1 31.2 2.0
FY22 67,376.8 33,132.2 24,971.7 13,025.5 3.5 42.5 357.8 1.2 12.0 15.8 1.8
FY23E 81,696.2 40,263.2 29,332.6 14,700.3 3.6 47.9 407.1 1.2 12.0 14.0 1.6
FY24E 93,101.3 45,773.9 34,088.3 16,573.7 3.7 54.0 462.1 1.2 12.0 12.4 1.4

3|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 ICFL valuation and price performance
Axis valuation and price performance
AUM/Book/ Total Value Value
SOTP Method Multiple Stake VPS INR
Earnings INR cr INR cr

Parent 141,743.1 P/adj B 1.9x 262,737.2 100.0% 262,737.2 856.5

Less: Investments in subs/JV 2,299.5 7.5

Core Book value 849.0

Value of Subsidiaries

Axis AMC 540.0 P/E 20.0x 10,800.0 75.0% 8,100.0 26.4

Axis Finance 2,250.0 P/adj B 1.9x 4,170.6 100.0% 4,170.6 13.6

Axis Capital 243.0 P/E 15.0x 3,645.0 100.0% 3,645.0 11.9

Axis securities 270.0 P/E 15.0x 4,050.0 100.0% 4,050.0 13.2

Total Value of Subs 19,965.6 65.1

Less: Hold co. disc @ 20% 3,993.1 13.0

Disc. value of subs 15,972.5 52.1

Target value for Axis Bank 278,710 901.1

1 year forward P/BV band chart [Link] to advances (x) has fallen rcently
Adj Price 1.9x 2.4x 2.8x 3.3x 3.8x 0.5
1,600
1,400
1,200 0.4
1,000
800
600 0.3
400
200
0 0.2
Apr-15
Apr-10

Apr-11

Apr-12

Apr-13

Apr-14

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20

Apr-21

Apr-22

FY17 FY18 FY19 FY20 FY21 FY22

Axis Bank price performance has been in line with Discount to ICICI Bank
500 indices unlike its peers 1.6

400 1.4
1.2
300
1.0
200
0.8
100
0.6
0 0.4
Oct-12
May-13

Jan-18

Oct-19
May-20
Apr-16

Dec-20
Dec-13

Feb-15

Feb-22
Aug-18
Nov-16
Mar-12

Mar-19
Jul-14

Sep-15

Jun-17

Jul-21

Jan-13

Oct-14
May-15
Dec-15

Jan-20

Oct-21
May-22
Feb-17

Apr-18
Aug-13
Jun-12

Sep-17

Nov-18

Aug-20
Mar-21
Mar-14

Jun-19
Jul-16

Axis Bank Bank Nifty Nifty

Source: Company, Ventura research

4|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 Our Bull and Bear Case Scenarios
We have prepared a Bull and Bear case scenario, with 3 variable sensitivity, based on FY24
AUM, NIM margins & target PB of the standalone entity.
 Bull Case: We have assumed an FY24 AUM of INR 9,52,204.9 cr in FY24 (CAGR of 15.1%
over FY21-24) and NIM margins of ~4.0% (+40bps over FY21), which will result in a Bull
Case price target of INR 1,158.6 per share (upside of 72.7% from CMP). We assign an
FY24 target PB of 2.4x.
 Bear Case: We have assumed an FY24 AUM of INR 8,40,742.8 cr in FY24 (CAGR of
10.5%) and NIM margins of ~3.0% (-58bps over FY21), which will result in a Bear Case
price target of INR 582.9 per share (downside of 13.1%). We assign an FY24 target PB
of 1.2x.
Bull & Bear Case Scenario
AUM CAGR of 15.1% over FY21-24 Bull Case Price
and NIM margin of 4.0% in FY24.
Target PB of 2.4x.
INR 1,158.6 per share

Target Price
INR 901.1 per share
(value at 4.0xFY24)

CMP
INR 671.0 per share

AUM CAGR of 10.5% over FY21-24 Bear Case price

and NIM margin of 3.0% in FY24. INR 582.9 per share
Target PB of 1.2x.

______________________________________________________________________________________________________________________________________________
Source: Company, Ventura research
Investment triggers
 Healthy profit growth expectation: Axis Bank is now expected to slow down
provisioning, given already high PCR and no major expectation of slippage in asset
quality leading to faster growth in PAT by 36.0% CAGR over FY21-24.

 Superior return ratios: We expect return ratios namely RoAA and RoAE to move by
50bps & 495bps from 0.7% & 7.1% in FY21 to 1.2% & 12.0% in FY24.

Catalysts
 Faster growth in retail loans and life insurance: Axis has recently acquired the
credit card and retail business of Citi bank and become a promoter in Max life. While
we expect both these businesses to be bottom-line accretive. A faster than
expected ramp up of these businesses can lead to a re-rating of the stock.

5|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 Peer Valuation

All figures in Price P/B Ratio P/E Ratio RoAE (%) RoAA (%) NIM (%) PPOP (%) Net Profit (%) GNPA (%) NNPA (%)
bn INR bn Mkt Cap INR 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024
Axis Bank 2,124 691 1.8 1.6 1.5 16.3 14.4 12.8 12.0 12.0 12.0 1.2 1.2 1.2 3.5 3.6 3.7 75.4 72.9 74.5 39.3 36.5 36.2 2.8 2.6 2.3 0.7 0.6 0.5
HDFC Bank 7,694 1,385 3.3 2.7 2.3 3.2 2.7 2.2 16.4 17.8 18.7 1.9 2.1 2.4 3.9 4.0 4.3 90.6 91.7 93.7 51.2 55.6 58.0 1.2 1.1 1.1 0.37 0.4 0.3
ICICI Bank 5,222 751 3.1 2.7 2.4 22.3 21.5 21.1 14.7 13.3 12.0 1.8 1.7 1.6 3.8 3.8 3.8 82.7 81.1 80.3 49.2 46.7 44.0 4.2 4.1 4.0 0.8 0.8 0.8
Kotak 3,688 1,857 5.1 4.4 3.9 43.0 33.0 30.7 12.6 14.3 13.4 2.1 2.4 2.3 4.3 4.9 4.9 71.7 80.9 79.8 51.0 53.4 52.5 2.3 2.2 2.1 0.6 0.6 0.6
Indusind 730 942 1.5 1.3 1.1 12.9 9.6 8.1 12.7 15.7 15.3 1.5 1.8 1.9 4.2 4.4 4.5 86.2 84.8 82.1 37.2 43.2 44.5 2.6 2.3 2.1 0.6 0.6 0.5
RBL Bank 66 109 0.5 0.5 0.4 36.0 5.4 4.2 1.5 9.2 10.8 0.2 1.0 1.2 4.0 4.1 4.2 78.8 78.0 78.5 4.5 26.5 29.7 5.3 5.0 4.8 1.8 1.6 1.5
BOM 118 18 0.8 0.7 0.7 10.2 7.4 6.0 8.7 10.6 11.8 0.5 0.6 0.7 3.0 3.1 3.3 63.7 68.6 68.7 19.1 21.8 23.2 3.9 4.0 3.8 1.0 0.9 0.9
SBI 4,192 469 1.5 1.3 1.1 9.2 7.0 5.6 13.6 15.6 16.7 0.7 0.9 1.0 2.9 3.0 3.1 63.3 65.6 67.7 37.4 44.1 48.5 4.2 3.8 3.2 1.3 1.3 1.1
Canara Bank 387 213 0.6 0.5 0.5 8.4 5.9 5.5 7.4 9.6 9.0 0.4 0.5 0.5 2.7 2.8 2.8 83.7 84.8 83.5 17.9 22.5 22.6 7.9 7.3 6.6 3.1 2.7 2.1
PNB 353 32 0.4 0.3 0.3 10.9 4.8 3.7 3.5 7.5 8.9 0.3 0.5 0.7 2.3 2.5 2.6 68.8 73.8 76.4 11.7 23.7 27.6 13.6 12.5 11.5 5.2 4.7 4.1
BOB 536 104 0.7 0.6 0.6 7.1 5.6 4.4 10.1 11.6 13.3 0.6 0.7 0.8 2.8 2.9 2.8 70.4 65.8 64.5 23.5 25.8 30.3 6.2 4.2 3.3 2.1 1.4 1.0
Source: Company Reports, Ventura Research, Bloomberg

6|P ag e ( 6t h Ju ne , 21) For any further query, please email us on research@[Link]

 Axis is available at a lucrative valuation given similar RoAE as compared to ICICI bank and Kotak

20.0
HDFC Bank
18.0
SBI
16.0
Indusind
FY24 RoAE %

14.0
BOB Kotak
12.0 BOM Axis Bank ICICI Bank
RBL Bank
10.0
Canara Bank
8.0
PNB
6.0
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
FY24 P/B

23

21
BOM
19

17 Kotak
AUM cagr (%)

15
Axis Bank Indusind
13 SBI
HDFC Bank
11 Canara Bank RBL Bank ICICI Bank

9
BOB
7 PNB

5
0.0 0.5 1.0 1.5 2.0 2.5 3.0
RoAA %
Source: Ventura Research, ACE Equity & Bloomberg, Size of bubble indicates NI in 2nd chart

7|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 Financial Analysis and Projections
Going forward, we expect Axis’ total AUM and NII to grow at a CAGR of 12.5% & 16.1% to
INR 8,87,733.8 cr & INR 45,773.9 cr, respectively, over FY21-24. Pre-provisioning operating
profit is expected to grow at a CAGR of 9.9% to INR 34,088.3 cr. We have modeled the NIMs
to grow by 12bps to 3.7% while other income is expected to grow at a 6.2% CAGR over the
same period. PPoP is expected to grow at 9.9% CAGR over FY21-24. Axis Bank is now
expected to slow down provisioning given the already high PCR and no major expectation
of slippage in asset quality, leading to faster growth in PAT by 36.0% CAGR over FY21-24.
Return ratios namely RoAA and RoAE are expected to grow by 50bps & 495bps over FY21-
24 to 1.2% and 12%, respectively. We have modeled the increase in cost to income ratio by
465bps against 41.7% in FY21.

Financial Summary
Fig in INR Cr (unless
FY20 FY21 FY22 FY23E FY24E FY25E FY26E FY27E FY28E FY29E FY30E
specified)
Advances 571,424.2 623,720.2 707,696.0 792,619.5 887,733.8 1,003,139.2 1,133,547.3 1,280,908.4 1,447,426.5 1,635,592.0 1,848,218.9
YoY Growth (%) 15.5 9.2 13.5 12.0 12.0 13.0 13.0 13.0 13.0 13.0 13.0
Retail 302,854.8 336,808.9 403,386.7 453,774.6 510,446.9 579,312.9 657,457.4 746,129.2 846,744.5 960,910.3 1,090,449.2
YoY Growth (%) 22.4 11.2 19.8 12.5 12.5 13.5 13.5 13.5 13.5 13.5 13.5
SME 62,856.7 68,609.2 77,846.6 91,151.2 106,528.1 125,392.4 147,361.1 172,922.6 202,639.7 237,160.8 277,232.8
YoY Growth (%) (2.3) 9.2 13.5 17.1 16.9 17.7 17.5 17.3 17.2 17.0 16.9
Corporate 205,712.7 218,302.1 226,462.7 247,693.6 270,758.8 298,433.9 328,728.7 361,856.6 398,042.3 437,520.9 480,536.9
YoY Growth (%) 12.4 6.1 3.7 9.4 9.3 10.2 10.2 10.1 10.0 9.9 9.8
Interest earned 62,635.2 63,645.3 67,376.8 81,696.2 93,101.3 102,738.2 116,074.2 131,307.6 148,588.7 168,205.3 190,473.2
YoY Growth (%) 13.9 1.6 5.9 21.3 14.0 10.4 13.0 13.1 13.2 13.2 13.2
Avg Yield (%) 8.3 7.8 7.1 8.1 7.5 7.4 7.4 7.4 7.4 7.4 7.4
Interest expended 37,429.0 34,406.2 34,244.6 41,433.0 47,327.4 54,430.7 59,925.5 66,869.3 74,605.8 82,143.0 91,600.2
YoY Growth (%) 12.5 (8.1) (0.5) 21.0 14.2 15.0 10.1 11.6 11.6 10.1 11.5
Avg cost of funds (%) 5.0 4.2 3.7 3.9 4.0 4.1 4.0 4.0 3.9 3.8 3.8
NII 25,206.2 29,239.1 33,132.2 40,263.2 45,773.9 48,307.5 56,148.7 64,438.3 73,982.8 86,062.3 98,873.0
NIM (%) 3.3 3.6 3.5 3.6 3.7 3.5 3.6 3.6 3.7 3.8 3.8
Other income 15,536.6 14,838.2 15,450.3 15,059.8 17,754.7 20,062.8 22,670.9 25,618.2 28,948.5 32,711.8 36,964.4
YoY Growth (%) 18.3 (4.5) 4.1 (2.5) 17.9 13.0 13.0 13.0 13.0 13.0 13.0
Operating expenses 17,304.6 18,375.2 23,610.8 25,990.4 29,440.3 32,714.7 36,414.8 40,557.3 45,197.0 50,395.4 56,222.3
YoY Growth (%) 9.3 6.2 28.5 10.1 13.3 11.1 11.3 11.4 11.4 11.5 11.6
PPOP 23,438.1 25,702.2 24,971.7 29,332.6 34,088.3 35,655.6 42,404.8 49,499.2 57,734.4 68,378.7 79,615.1
YoY Growth (%) 23.3 9.7 (2.8) 17.5 16.2 4.6 18.9 16.7 16.6 18.4 16.4
As a % of NII 93.0 87.9 75.4 72.9 74.5 73.8 75.5 76.8 78.0 79.5 80.5
Provisions 18,533.9 16,896.3 7,589.2 9,679.7 11,930.9 12,122.9 13,993.6 15,839.7 17,897.7 20,513.6 23,088.4
As a % of PPoP 79.1 65.7 30.4 33.0 35.0 34.0 33.0 32.0 31.0 30.0 29.0
PBT 4,904.2 8,805.8 17,382.6 19,652.8 22,157.4 23,532.7 28,411.2 33,659.4 39,836.7 47,865.1 56,526.7
YoY Growth (%) (29.7) 79.6 97.4 13.1 12.7 6.2 20.7 18.5 18.4 20.2 18.1
Tax 3,277.0 2,217.3 4,357.1 4,952.5 5,583.7 5,930.2 7,159.6 8,482.2 10,038.9 12,062.0 14,244.7
PAT 1,627.2 6,588.5 13,025.5 14,700.3 16,573.7 17,602.5 21,251.6 25,177.2 29,797.9 35,803.1 42,282.0
YoY Growth (%) (65.2) 304.9 97.7 12.9 12.7 6.2 20.7 18.5 18.4 20.2 18.1

GNPA 30,233.8 25,314.8 21,822.3 19,769.0 18,626.8 17,076.9 17,053.1 16,734.4 16,044.8 14,893.0 13,170.6
NNPA 9,360.4 6,993.5 5,512.2 4,993.5 4,705.0 4,313.5 4,307.5 4,227.0 4,052.8 3,761.9 3,326.8
GNPA % 4.9 3.7 2.8 2.6 2.3 2.1 1.8 1.6 1.3 1.1 0.8
NNPA % 1.6 1.1 0.7 0.6 0.5 0.4 0.4 0.3 0.3 0.2 0.2
CAR 17.5 19.1 18.5 18.3 18.5 18.4 18.4 18.5 18.6 18.9 19.3
Tier I 14.5 15.4 15.2 15.1 15.2 15.1 15.1 15.2 15.3 15.5 15.8
Source: Company Reports & Ventura Research

8|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 Key Investment highlights

Acquisition of Citibank’s Indian consumer business to help fill profile gaps

Axis bank recently acquired Citibank N.A. (CBNA) and Citicorp Finance’s (CFIL) entire
consumer business in India. Via the acquisition, Axis bank will get instant access to the
affluent customer segment and hence, address a gap in Axis bank’s current customer
positioning. For the acquisition, Axis Bank will pay INR 12,325 cr in cash while another INR
1,500 cr will be paid as integration cost over 2 years from the date of closing of the
transaction.

The deal is expected to close in 9-12 months for regulatory approvals and customer consent.
Post closure of the transaction in Q4FY23, it would take 18 months’ time for the transition,
during which Citibank would provide various services to support normal business
operations.

The transaction would give Axis Bank INR 18,500 cr in consumer loans, like mortgages,
asset-backed finance and personal loans but more importantly, access to 2.55 million high-
spending credit card customers. The deal will also strengthen Axis Bank’s status as the
country’s third-largest private lender and help it compete with larger rivals, HDFC Bank and
ICICI Bank, in lucrative segments. Citibank’s consumer business also includes wealth
management and retail banking operations. Citi is also known for its superior customer
support system, which Axis Bank wants to replicate.

Snapshot of acquired portfolio of Citi

Source: Company, Ventura research

Max life acquisition to help Axis plug gaps in financial product offerings

Axis Bank in its subsidiaries collectively acquired a 12.99% stake in Max Life Insurance
Company Limited (Max Life), which was the 4th largest private life insurance firm in April,

9|P ag e ( 6t h Ju ne , 21 ) For any further query, please email us on research@[Link]

 21. The bank is likely to raise this stake to 20% in the next 6-9 months. The acquisition will
be value accretive for Axis Bank from the first day itself, given that Axis Bank already had a
successful relationship with Max Life for over a decade and was its largest distribution
partner with ~ INR 40,000 of premium collected for Max Life before the acquisition. With
the acquisition of Max life, Axis Bank will be able to plug in a long term portfolio gap by
offering insurance products to its clients and generate volumes for Max Life by cross selling.

We expect deposits to form 82% of total liability mix

HDFC group Kotak ICICI Axis SBI
Banking operations     
AMC     
Brokerage     
Investment banking     
Institutional equities     
Credit cards     
Insurance    × 
Source: Company, Ventura research

We expect loan growth at a 12.5% CAGR between FY21-FY24E

Axis’ loan book has grown at a 12.4% CAGR between FY18-21. We have not modeled any
acceleration in loan book growth over the historical rate, given expectation of calibrated
lending. We expect the loan book to grow at a 12.5% CAGR over FY21-24E to INR 8,87,733.8
cr driven by:

 14.9% CAGR in Retail loans to INR 5,10,446.9 cr

 15.8% CAGR in SME loans to INR 1,06,528.1 cr
 7.4% CAGR in Corporate loans to INR 2,70,758.8 cr

We expect advances to grow at a 12.5% CAGR over FY21-24

We expect net advances to grow at a 12.5% CAGR over FY21-24E

INR cr
1,000,000.0
900,000.0
800,000.0
270,758.8
700,000.0
247,693.6
600,000.0 226,462.7
106,528.1
500,000.0 218,302.1 91,151.2
205,712.7 77,846.6
400,000.0
68,609.2
62,856.7
300,000.0
453,774.6 510,446.9
200,000.0 403,386.7
302,854.8 336,808.9
100,000.0
-
FY20 FY21 FY22E FY23E FY24E

Retail SME Corporate

10 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 We expect faster growth in retail loans resulting in an increase in its share over FY21-24E
100.0%
90.0%
36.0% 35.0% 32.0% 31.3% 30.5%
80.0%
70.0%
60.0% 11.0% 11.5% 12.0%
11.0% 11.0%
50.0%
40.0%
30.0% 57.0% 57.3% 57.5%
53.0% 54.0%
20.0%
10.0%
0.0%
FY20 FY21 FY22E FY23E FY24E

Retail SME Corporate

Source: Company, Ventura research

Credit to deposit ratio & CASA ratio are expected to stay at FY21 levels

We expect the credit to total deposits ratio to stay at 70% with the overall share of CASA
expected to touch 43.0% of total deposits in FY24. We expect a mix of customer deposits
and borrowings to stay at ~81% (as against 83% seen in FY21).

We expect deposits to form 82% of the total liability mix

INR cr
1,400,000
1,248,456
1,200,000 1,117,914
1,006,855 1,023,324
1,000,000 916,323
850,179 821,721
788,059
800,000 707,306
640,105
600,000

400,000
185,134 201,591 225,131
200,000 147,954 142,873

-
FY20 FY21 FY22E FY23E FY24E
Deposits Borrowings Total

Source: Company, Ventura research

11 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 We have modeled credit to deposit & borrowings at ~71% in FY24 while CASA is expected to grow steadily to 41.2% in FY24

Credit to Deposit & Borrowings % CASA %

74.0 42.0
73.4 41.2
73.5
41.0 40.7
73.0 40.2
72.5
72.5 40.0 39.6
72.0
71.5 39.0
71.1
70.9
71.0
38.0 37.5
70.5 70.3
70.0 37.0
69.5
36.0
69.0
68.5 35.0
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E

Source: Company, Ventura research

Further, with a rise in the loan book, we expect NII to grow at 16.1% CAGR over FY21-24.
We have not baked in any major rise in NIMs and have kept yield and cost of borrowings at
similar levels as in FY21.

We expect NIMs to remain the same over FY21-24E

NII is expected to grow at 16.1% CAGR over FY21- % We expect NIMs to be same as seen in FY21
INR cr 24E 9.0
50,000.0 45,773.9
8.0
45,000.0
40,263.2
40,000.0 7.0
35,000.0 33,132.2
29,239.1 6.0
30,000.0 25,206.2
25,000.0 5.0
20,000.0
15,000.0 4.0
10,000.0
3.0
5,000.0
- 2.0
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E
Yield % Cost of funds % NIMs %

Source: Company, Ventura research

PPoP & net income are expected to grow by 9.9% & 36.0% CAGR between FY21-24E

We expect the PPoP to grow by 9.9% CAGR over FY21-24E. However, we expect slowdown
in provisioning from hereon which should lead to a faster growth in net income by 36.0%
CAGR over FY21-24E.

12 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Net income is expected to grow faster for the bank as provisioning slows down from hereon

INR cr PPoP is expected to grow by 9.9% CAGR over FY21-24 INR cr Net income is expected to grow by 36.0% CAGR
40,000 over FY21-24
34,088 18,000 16,574
35,000
16,000 14,700
29,333
30,000 13,025
25,702 14,000
24,972
25,000 23,438
12,000

20,000 10,000
8,000 6,588
15,000
6,000
10,000
4,000
5,000 1,627
2,000
- -
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E

Source: Company, Ventura research

In terms of asset quality, we expect GNPA and NNPA to improve by 138bps and 52bps from
3.7% & 1.1% in FY21 to 2.3% & 0.5% in FY24.

We expect GNPA and NNPA to fall by 138 & 52bps over FY21-24 respectively

GNPA % NNPA %
5.5% 1.7%
5.0%
1.5%
4.5%
1.3%
4.0%
3.5% 1.1%

3.0% 0.9%
2.5%
0.7%
2.0%
0.5%
1.5%
1.0% 0.3%
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E

Source: Company, Ventura research

Return ratios, namely RoAA and RoAE, are expected to move by 50bps & 495bps from 0.7%
& 7.1% in FY21 to 1.2% & 12.0% in FY24.

13 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Return ratios are expected to improve drastically from FY21 levels

RoAA is expected to improve by 50bps over FY21- RoAE is expected to improve by 495bps over FY21-
24E 24E
1.4% 14.6%
1.2% 12.6%
1.0% 10.6%
0.8% 8.6%
0.6% 6.6%
0.4% 4.6%
0.2% 2.6%
0.0% 0.6%
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E

CAR and Tier I PCR %

21.0 76.0 74.7 74.7 74.7
75.0
19.0 74.0
73.0 72.4
72.0
17.0 71.0
70.0 69.0
15.0 69.0
68.0
67.0
13.0 66.0
FY20 FY21 FY22E FY23E FY24E FY20 FY21 FY22E FY23E FY24E
CAR % Tier I %

Source: Company, Ventura research

Valuation

Axis Bank has historically performed in line with broader indices. However, this is due to the
fact that the company had seen a major clean-up process in the past leading to subdued
profits. However, we now expect Axis to report superior profitability. We initiate coverage
on Axis with a PT of INR 901.1 (1.9x FY24 standalone P/B) representing an upside of 31.1%
over the CMP of INR 691.0 over 24 months. We have used the SOTP method for the
valuation. Our optimism stems from the following:

 Net advances are expected to grow at 12.5% CAGR over FY21-24E.

 NII is expected to grow at 16.1% CAGR over FY21-24E.
 PPoP & Net income is expected to grow at 9.9% & 36.0% CAGR over FY21-24E.

14 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Valuation methodology
Value
AUM/Book/ Total Values Value per
Sum of the parts valuation Method Multiple Stake attributable to
Earnings/[Link] INR cr share INR
Axis INR cr

Parent 141,743.1 P/adj B 1.9x 262,737.2 100.0% 262,737.2 856.5

Less: Investments in subs/JV
2,299.5 7.5
as per FY21 annual report
Core Book value 849.0

Value of Subsidiaries

Axis AMC 540.0 P/E 20.0x 10,800.0 75.0% 8,100.0 26.4

Axis Finance 2,250.0 P/adj B 1.9x 4,170.6 100.0% 4,170.6 13.6

Axis Capital 243.0 P/E 15.0x 3,645.0 100.0% 3,645.0 11.9

Axis securities 270.0 P/E 15.0x 4,050.0 100.0% 4,050.0 13.2

Total Value of Subsdiaries 19,965.6 65.1

Less: Hold co discount at
3,993.1 13.0
20%
Discounted value of
15,972.5 52.1
Subsidiaries
Target value for Axis Bank 278,710 901.1

Source: Company, Ventura research

15 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Axis’ Key Management Personnel bring immense industry experience to the table
Key Person Designation Details

Amitabh Chaudhry is an Engineer from Birla Institute of Technology and Science, Pilani
and has done his Post Graduate in Business Management from IIM, Ahmedabad. He
Amitabh Chaudhry CEO & MD
joined the Bank as its MD & CEO on 1st January 2019, after successfully leading HDFC
Standard Life Insurance Company Limited (HDFC Life), for over nine years.

Non-Executive Rakesh Makhija is an Engineer from the Indian Institute of Technology, New Delhi.
Rakesh Makhija Independent Part-time During his career spanning over four decades, he has been an active contributor to
Chairman the Industrial and Technology sectors, both internationally and in India.

Independent Non- S. Vishvanathan is an Independent Director of the Bank since 11th February 2015.
S Vishvanathan
Executive Director He has done his [Link]. in Physics and has completed MBA and CAIIB.

She is a former Chief Investment Officer in the Financial Institutions Group at the
Independent Non-
Ketaki Bhagwati International Finance Corporation (IFC), the private sector financing arm of the World
Executive Director
Bank Group.

Independent Non- Girish Paranjpe served as the Co-CEO of Wipro's IT Business from 2008-2011 and was
Girish Paranjpe
Executive Director a member of the Board of Directors Wipro Ltd.

Independent Non- Meena Ganesh is a PGDM holder from IIM Calcutta and has a graduate degree in
Meena Ganesh
Executive Director Physics from the Madras University.

He holds extensive experience and expertise in bank regulation and supervision of

Gopalaraman Independent Non-
foreign exchange/securities markets in India, information technology and payment
Padmanabhan Executive Director
systems.

Non-Executive
Ashish Kotecha Ashish Kotecha joined Bain Capital Private Equity in 2010. He is a Managing Director
(Nominee) Director
and leads the Portfolio Group in Asia.

Vasantha Govindan is currently the CEO of The Specified Undertaking of the Unit Trust
Vasantha Govindan Nominee Director
of India (SUUTI), a Government of India entity.

Prof. S. Mahendra Independent Non – Prof. S. Mahendra Dev has been the Director and Vice Chancellor, Indira Gandhi
Dev Executive Director Institute of Development Research (IGIDR) in Mumbai, India since 2010.

Non-Executive T.C. Suseel, Kumar has retired as Managing Director of Life Insurance Corporation of
T.C. Suseel Kumar
(Nominee) Director India in January 2021.

16 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Deputy Managing Rajiv Anand, 55 years, with an illustrious career spanning more than 30 years has
Rajiv Anand
Director focused on various facets of the financial services industry.

Deepak Maheshwari is the Group Executive and Chief Credit Officer of the Bank since
January, 2019 and is responsible for credit underwriting, policy and monitoring. He
Deepak Group Executive and
joined Axis Bank after spending two decades in HDFC Bank where he was Group Head
Maheshwari Chief Credit Officer
of the Wholesale Credit function, responsible for asset quality, sanctions, policy and
monitoring of the entire Wholesale credit portfolio of that Bank.

Ganesh Sankaran is the Group Executive - Wholesale Banking Coverage Group at Axis
Group Executive - Bank since March 2019. He has nearly 25 years of experience across coverage, credit
Ganesh Sankaran Wholesale Banking and risk functions and has handled verticals like Corporate Credit, Financial
Coverage Group Institutions, Business Banking, Mortgages, Commercial Transportation, Equipment
Finance & Rural Lending.

Puneet Sharma is the Chief Financial Officer of the Bank since March 2020. He has
over two decades of experience in banks, financial institutions and consulting. In his
Puneet Sharma Chief Financial Officer
previous stint, he was with Tata Capital Limited for 12 years, as a senior management
functionary interacting extensively with the Board.

Sumit Bali is the Group Executive and Head – Retail Lending, Axis Bank. Sumit is a
Group Executive and
Sumit Bali veteran in the banking industry with almost 3 decades of rich experience in Retail
Head – Retail Lending
Banking.

Munish Sharda is the Group Executive & Head – Bharat Banking, Axis Bank since
September 2021. With a career spanning over 27 years, Munish brings in rich
Group Executive and
Munish Sharda leadership experience with a successful track record of financial and operational
Head - Bharat Banking
turnarounds, leveraging digital and tech stack and enhancing people capabilities to
transform business across the banking and insurance industries.

Ravi Narayanan is the Group Executive – Retail Liabilities, Branch Banking & Products
Group Executive – Retail at Axis Bank since May 2021. He has more than 26 years of experience in the banking
Ravi Narayanan Liabilities, Branch industry and leads all functions under Branch Banking (Liabilities, Sales & Operations),
Banking & Products Alternate Channels, Third Party Products, Wealth Management, Axis Virtual Centre,
Retail Forex & Remittances and UAE representative offices.

Group Executive – Subrat Mohanty is the Group Executive – Banking Operations & Transformation at
Subrat Mohanty Banking Operations & Axis Bank since October, 2020. He leads all functions under Retail & Wholesale
Transformation Banking Operations, Information Technology, Strategy and Business Intelligence Unit
of the Bank.
Source: Company, Ventura Research

17 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Business Quality Score
Key Criteria Score Risk Comments
Management & Leadership
The management has full discretion in running operations like in HDFC Bank
Management Quality 7 Low
and ICICI Bank.

There is no promoter pledge as on Dec, 21. Also, Axis Bank is promoted by

Promoters Holding Pledge 10 Low
government-backed entities like LIC and UTI.

The board consists of directors with significant experience & industry

Board of Directors Profile 8 Low
knowledge.
Industry Consideration
Credit growth is expected to be good in the near term due to high GDP
Industry Growth 6 Low
growth expectations.

Banks operate in a highly regulated environment under the supervision of

Regulatory Environment or Risk 4 High
RBI.

Entry barriers are high due to license requirements but currently private
Entry Barriers / Competition 4 High
banks are facing fierce competition from fintech players.

Business Prospects

Axis Bank has historically lagged peers like Kotak, HDFC and ICICI Bank in
New Business / Client Potential 6 Low scaling its nonbanking business. However, the bank has recently upped the
ante on this account.

Market Share Potential 7 Low Private banks are winning market share from PSUs.

Margin Expansion Potential 6 Low NIMs are expected to stay more or less at the same levels as seen in FY21.

Earnings Growth 8 Low We expect net income to grow at 37.5% CAGR over FY21-24.

Valuation and Risk

The balance sheet strength is not as high as Kotak Bank given comparatively
Balance Sheet Strength 5 Medium
low Tier I.

Total Score 71 The overall risk profile of the company is good and we consider it
Medium
Ventura score (%) 65 as a medium risk company for investments

Source: Company Reports & Ventura Research, Total score >=75 = low risk, between 50-74 = medium risk, less than 50= high risk

18 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Annual Report Analysis
We analyzed the FY21 annual report of Axis Bank and our key observations are as follows:

Key takeaways

 Technology: Made significant investment in the ‘Business Solutions Group’ to drive

innovative technology solutions and build a greater collaboration between business
and technology. Axis adopted an agile methodology with multiple cross-functional
squads working on over 220 high-priority, organisation-wide transformation projects.

 Deposit side: The focus on deepening existing liability relationships and acquiring
quality customers as part of the premiumisation strategy continued to progress well.
During the year, Axis acquired over 6.7 million new liability relationships, including
over 2.8 million new savings account relationships that had higher average balances
across retail savings and premium segment accounts. Emphasis on acquiring top
corporate relationships in the salary segment resulted in 25% y-o-y growth in the salary
deposits book.

 Wealth management: Wealth management business ‘Burgundy’ (Maintenance of a

minimum Total Relationship Value (TRV) of INR 5 cr by 12 months of
account/relationship initiation) continued to grow strongly with its AUM growing 45%
YoY to cross the INR 2 trillion mark. Axis’s team of relationship managers, wealth
specialists and advisors along with strong product portfolio offerings helped to scale
up ‘Burgundy Private’ proposition to cover over 1,660 families with assets to nearly
INR 50,000 crores in just 15 months since its launch.

 Digital banking: 800-plus people fully dedicated to digital transformation of the Bank,
including a strong in-house full stack technology team of 110 people, in roles across
design, front-end and back-end development, DevOps, Quality Assurance, etc.

 Digital product launches: Launched a bouquet of digital products across deposits,

loans, cards and investments, many of them being industry first, like a cloud-native
loan management system built in-house and the full end-to-end digital forex card
proposition. The products started making contributions to the Bank sourcing with
close to 1.35 lakh digital SA accounts opened leveraging the video KYC while 71% of
fixed deposits and over 40% of Mutual Funds were sourced digitally in FY21.

 Corporate lending: During the year, focused segments, like mid-Corporate and MNC
delivered 31% and 49% YoY growth. The bank continued its focus on deepening
relationships with better rated corporates with an aim of not just lending against the
balance sheet to these clients but also growing the wallet share of non-credit business,
like trade, forex and cash management.

19 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Auditors’ Qualifications & Significant Notes to Accounts
M/s Haribhakti & Co. LLP are the statutory auditors. The auditors have not expressed any major
qualification in their report.

Contingent Liabilities

Due to the very nature of the industry, contingent liabilities as a percent of net worth is high.

Contingent Liabilities are reasonably high

FY18 FY19 FY20 FY21
Claims against the Bank 516.9 623.5 1,957.3 2,053.9
Partly paid investments 2.2 1.8 138.8 164.8
Liability of o/s contracts
Forward Contracts 314,801.9 329,653.8 455,978.7 510,117.9
Swaps and futures 196,069.5 237,587.1 301,597.2 335,417.6
Foreign Currency Options 59,342.6 46,404.8 45,114.1 36,504.3
Total 570,733.0 614,271.0 804,786.1 884,258.4
Guarantees
In India 76,293.4 68,052.9 66,479.7 72,965.2
Outside India 8,682.0 7,535.8 7,434.0 7,865.6
Acceptances, endorsements 32,410.1 32,439.5 25,165.0 37,805.8
Other item 47,159.8 33,466.1 19,103.9 49,763.7
Total 735,278.3 755,765.3 922,968.8 1,052,658.8
Networth 63,445.3 66,676.3 84,947.8 101,603.0
As a % of nethworth 1,158.9 1,133.5 1,086.5 1,036.1
Source: Company Reports & Ventura research

20 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Key Risks & Concerns

 Competition with Fintech firms: Private sector banks are currently facing fierce
completion from fintech players.

 Asset quality pain in new loans: Any unexpected change in the economic outlook can
lead to big slippages even in new loans.

Quarterly and Annual Performance

Figures in INR Cr FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 FY22 FY23E FY24E
Interest Earned 62,635.2 16,538.9 16,062.9 15,498.4 15,545.2 63,645.3 16,003.5 16,336.0 17,261.1 17,776.2 67,376.8 81,696.2 93,101.3
Growth % 1.6% -3.2% 1.7% 11.4% 14.4% 5.9% 21.3% 14.0%
Interest 48,303.0 12,587.4 12,189.0 11,544.3 11,598.2 47,918.9 11,881.5 11,986.7 12,679.0 13,069.4 49,616.6 58,512.3 67,214.1
Growth % -0.8% -5.6% -1.7% 9.8% 12.7% 3.5% 17.9% 14.9%
Interest on bal with RBI 1,095.3 439.9 259.1 116.5 222.4 1,037.9 259.9 405.4 418.1 444.8 1,528.2 3,091.9 3,426.8
Growth % -5.2% -40.9% 56.5% 258.9% 100.0% 47.2% 102.3% 10.8%
Income from investments 11,246.0 2,973.0 3,101.9 3,189.8 3,293.5 12,558.2 3,428.2 3,521.6 3,766.8 3,902.3 14,618.9 18,490.1 20,634.8
Growth % 11.7% 15.3% 13.5% 18.1% 18.5% 16.4% 26.5% 11.6%
Others 1,990.9 538.6 512.9 647.8 431.1 2,130.3 433.9 422.3 397.3 359.8 1,315.3 1,601.9 1,825.5
Growth % 7.0% -19.4% -17.7% -38.7% -16.5% -38.3% 21.8% 14.0%
Interest Expended 37,429.0 9,553.6 8,736.8 8,125.6 7,990.2 34,406.2 8,243.2 8,435.7 8,608.6 8,957.1 34,244.6 41,433.0 47,327.4
Growth % -8.1% -13.7% -3.4% 5.9% 12.1% -0.5% 21.0% 14.2%
Net Interest Income 25,206.2 6,985.3 7,326.1 7,372.8 7,555.0 29,239.1 7,760.3 7,900.3 8,652.5 8,819.1 33,132.2 40,263.2 45,773.9
Growth % 16.0% 11.1% 7.8% 17.4% 16.7% 13.3% 21.5% 13.7%
Other Income 15,536.6 2,586.7 3,807.2 3,776.0 4,668.3 14,838.2 3,588.2 3,798.4 3,840.4 4,223.3 15,450.3 15,059.8 17,754.7
Growth % -4.5% 38.7% -0.2% 1.7% -9.5% 4.1% -2.5% 17.9%
Net Operating Income 40,742.8 9,572.0 11,133.3 11,148.8 12,223.3 44,077.3 11,348.4 11,698.7 12,492.9 13,042.5 48,582.5 55,322.9 63,528.5
Growth % 8.2% 18.6% 5.1% 12.1% 6.7% 10.2% 13.9% 14.8%
Employee Cost 5,321.0 1,406.1 1,412.9 1,677.4 1,667.6 6,164.0 1,851.9 1,935.5 1,938.6 1,886.5 7,612.6 8,046.5 8,609.7
Growth % 15.8% 31.7% 37.0% 15.6% 13.1% 23.5% 5.7% 7.0%
Other Operating Exp 11,983.6 2,321.5 2,822.7 3,375.9 3,691.0 12,211.1 3,080.5 3,835.0 4,392.8 4,690.0 15,998.2 17,943.9 20,830.5
Growth % 1.9% 32.7% 35.9% 30.1% 27.1% 31.0% 12.2% 16.1%
Cost to income ratio 42.5% 38.9% 38.0% 45.3% 43.8% 41.7% 43.5% 49.3% 50.7% 50.4% 48.6% 47.0% 46.3%
Operating Profit 23,438.1 5,844.4 6,897.6 6,095.5 6,864.7 25,702.2 6,416.0 5,928.2 6,161.5 6,466.0 24,971.7 29,332.6 34,088.3
Growth % 9.7% 9.8% -14.1% 1.1% -5.8% -2.8% 17.5% 16.2%
Provisions 18,533.9 4,416.4 4,580.7 4,604.3 3,295.0 16,896.3 3,532.0 1,735.1 1,334.8 987.2 7,589.2 9,679.7 11,930.9
Growth % -8.8% -20.0% -62.1% -71.0% -70.0% -55.1% 27.5% 23.3%
PBT 4,904.2 1,428.0 2,317.0 1,491.2 3,569.7 8,805.8 2,884.0 4,193.1 4,826.7 5,478.8 17,382.6 19,652.8 22,157.4
Growth % 79.6% 102.0% 81.0% 223.7% 53.5% 97.4% 13.1% 12.7%
Taxes 3,277.0 315.8 634.3 374.6 892.6 2,217.3 723.9 1,059.8 1,212.5 1,361.0 4,357.1 4,952.5 5,583.7
Tax Rate 66.8% 22.1% 27.4% 25.1% 25.0% 25.2% 25.1% 25.3% 25.1% 24.8% 25.1% 25.2% 25.2%

PAT 1,627.2 1,112.2 1,682.7 1,116.6 2,677.1 6,588.5 2,160.2 3,133.3 3,614.2 4,117.8 13,025.5 14,700.3 16,573.7
Growth % 304.9% 94.2% 86.2% 223.7% 53.8% 97.7% 12.9% 12.7%
Gross NPA 30,233.8 29,560.0 26,832.0 21,998.0 25,314.8 25,314.8 25,949.0 24,149.0 23,301.0 21,822.0 21,822.3 19,769.0 18,626.8
Gross NPA % 4.9% 4.7% 4.2% 3.4% 3.7% 3.7% 3.9% 3.5% 3.2% 2.8% 2.8% 2.6% 2.3%
Net NPA 9,360.4 7,448.0 6,108.0 4,610.0 6,994.0 6,994.0 7,846.0 7,200.0 6,513.0 5,512.0 5,512.2 4,993.5 4,705.0
Net NPA % 1.6% 1.2% 1.0% 0.7% 1.1% 1.1% 1.2% 1.1% 0.9% 0.7% 0.7% 0.6% 0.5%
PCR 69.0% 74.8% 77.2% 79.0% 72.4% 72.4% 69.8% 70.2% 72.0% 74.7% 74.7% 74.7% 74.7%

Source: Company Reports & Ventura Research

21 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Financial Analysis & Projections
Y/E March (INR cr) FY20 FY21 FY22 FY23E FY24E Y/E March (INR crore) FY20 FY21 FY22 FY23E FY24E
Income Statement Ratio Analysis
Interest Income 62,635.2 63,645.3 67,376.8 81,696.2 93,101.3 Efficiency Ratio (%)
Interest Expense 37,429.0 34,406.2 34,244.6 41,433.0 47,327.4 Int Expended / Int Earned 59.8 54.1 50.8 50.7 50.8
Net Interest Income 25,206.2 29,239.1 33,132.2 40,263.2 45,773.9 Int Income / Total Funds 6.8 6.4 5.7 6.2 6.4
YoY change (%) 16.1 16.0 13.3 21.5 13.7 NII / Total Income 32.2 37.3 40.0 41.6 41.3
Non Interest Income 15,536.6 14,838.2 15,450.3 15,059.8 17,754.7 Other Inc. / Total Income 19.9 18.9 18.7 15.6 16.0
Total Net Income 40,742.8 44,077.3 48,582.5 55,322.9 63,528.5 Ope. Exp. / Total Income 22.1 23.4 28.5 26.9 26.6
Total Operating Expenses 17,304.6 18,375.2 23,610.8 25,990.4 29,440.3 Net Profit / Total Funds 0.2 0.7 1.1 1.1 1.1
Pre Provision profit 23,438.1 25,702.2 24,971.7 29,332.6 34,088.3 Credit / Deposit 89.3 88.2 86.1 86.5 86.8
YoY change (%) 23.3 9.7 -2.8 17.5 16.2 Investment / Deposit 24.5 32.0 33.5 32.0 32.0
Provisions 18,533.9 16,896.3 7,589.2 9,679.7 11,930.9 NIM 3.3 3.6 3.5 3.6 3.7
Profit Before Tax 4,904.2 8,805.8 17,382.6 19,652.8 22,157.4
YoY change (%) -29.7 79.6 97.4 13.1 12.7 Solvency
Taxes 3,277.0 2,217.3 4,357.1 4,952.5 5,583.7 Gross NPA (Rs. Cr) 30,233.8 25,314.8 21,822.3 19,769.0 18,626.8
Net profit 1,627.2 6,588.5 13,025.5 14,700.3 16,573.7 Net NPA (Rs. Cr) 9,360.4 6,993.5 5,512.2 4,993.5 4,705.0
YoY change (%) -65.2 304.9 97.7 12.9 12.7 Gross NPA (%) 4.9 3.7 2.8 2.6 2.3
Net NPA (%) 1.6 1.1 0.7 0.6 0.5
Balance Sheet Capital Adequacy Ratio (%) 17.5 19.1 18.5 18.3 18.5
Cash & Balances with RBI 97,268.3 61,729.8 110,987.1 121,821.0 136,804.5 Tier I Capital (%) 14.5 15.4 15.2 15.1 15.2
Fixed assets 4,312.9 4,245.0 4,572.4 6,835.8 7,644.2 Tier II Capital (%) 3.0 3.7 3.3 3.3 3.3
Investments 156,734.3 226,119.6 275,597.2 292,940.5 327,147.9
Loan and Advances 571,424.2 623,720.2 707,696.0 792,619.5 887,733.8
Other Assets 85,425.2 80,303.8 76,325.5 93,132.8 102,089.4 Per Share Data
Total Assets 915,164.8 996,118.4 1,175,178.1 1,307,349.5 1,461,419.8 EPS 5.8 22.2 42.5 47.9 54.0
Deposits 640,104.9 707,306.1 821,720.9 916,323.1 1,023,324.3 Book Value 301.1 331.6 375.8 423.4 477.4
Borrowings 147,954.1 142,873.2 185,133.9 201,591.1 225,131.3 Adj Book Value of Share 267.9 308.8 357.8 407.1 462.1
Other Liability 42,157.9 44,336.2 53,149.3 59,561.0 66,516.1
Equity 564.3 612.8 614.0 614.0 614.0 Valuation Ratio
Reserves 84,383.5 100,990.3 114,411.5 129,111.8 145,685.6 Price/Earnings (x) 116.4 30.3 15.8 14.0 12.4
Share warrant O/s 0.0 0.0 148.6 148.6 148.6 Price/Book Value (x) 2.2 2.0 1.8 1.6 1.4
Total Liabilities 915,164.8 996,118.4 1,175,178.1 1,307,349.5 1,461,419.8 Price/[Link] Value (x) 2.5 2.2 1.9 1.6 1.5

Dupont Analysis Return Ratio

% of Average Assets RoAA (%) 0.2 0.7 1.2 1.2 1.2
Net Interest Income 2.9 3.1 3.1 3.2 3.3 RoAE (%) 2.1 7.1 12.0 12.0 12.0
Non Interest Income 1.8 1.6 1.4 1.2 1.3
Net Income 4.7 4.6 4.5 4.5 4.6 Growth Ratio (%)
Operating Expenses 2.0 1.9 2.2 2.1 2.1 Interest Income 13.9 1.6 5.9 21.3 14.0
Operating Profit 2.7 2.7 2.3 2.4 2.5 Interest Expenses 12.5 -8.1 -0.5 21.0 14.2
Provisions & Contingencies 2.2 1.8 0.7 0.8 0.9 Other Income 18.3 -4.5 4.1 -2.5 17.9
Taxes 0.4 0.2 0.4 0.4 0.4 Total Income 14.8 0.4 5.5 16.8 14.6
ROAA 0.2 0.7 1.2 1.2 1.2 Net profit -65.2 304.9 97.7 12.9 12.7
Deposits 16.7 10.5 16.2 11.5 11.7
Advances 15.5 9.2 13.5 12.0 12.0

Source: Company Reports & Ventura Research

22 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]

 Disclosures and Disclaimer

Ventura Securities Limited (VSL) is a SEBI registered intermediary offering broking, depository and portfolio management services to clients. VSL is member of BSE, NSE
and MCX-SX. VSL is a depository participant of NSDL. VSL states that no disciplinary action whatsoever has been taken by SEBI against it in last five years except
administrative warning issued in connection with technical and venial lapses observed while inspection of books of accounts and records. Ventura Commodities Limited,
Ventura Guaranty Limited, Ventura Insurance Brokers Limited and Ventura Allied Services Private Limited are associates of VSL . Research Analyst (RA) involved in the
preparation of this research report and VSL disclose that neither RA nor VSL nor its associates (i) have any financial interest in the company which is the subject matter
of this research report (ii) holds ownership of one percent or more in the securities of subject company (iii) have any material conflict of interest at the time of
publication of this research report (iv) have received any compensation from the subject company in the past twelve months (v) have managed or co-managed public
offering of securities for the subject company in past twelve months (vi) have received any compensation for investment banking merchant banking or brokerage
services from the subject company in the past twelve months (vii) have received any compensation for product or services from the subject company in the past twelve
months (viii) have received any compensation or other benefits from the subject company or third party in connection with the research report. RA invol ved in the
preparation of this research report discloses that he / she has not served as an officer, director or employee of the subject company. RA involved in the preparation of
this research report and VSL discloses that they have not been engaged in the market making activity for the subject company. Our sales people, dealers, traders and
other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed
herein. We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/ infor mation inconsistent or different those
made in this report. In reviewing this document, you should be aware that any or all of the foregoing, among other things, ma y give rise to or potential conflicts of
interest. We may rely on information barriers, such as "Chinese Walls" to control the flow of information contained in one or more areas within us, or other areas, units,
groups or affiliates of VSL. This report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an
offer to buy, purchase or subscribe to any securities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection
with any contract or commitment whatsoever. This document does not solicit any action based on the material contained herein. It is for the general information of the
clients / prospective clients of VSL. VSL will not treat recipients as clients by virtue of their receiving this report. It does not constitute a personal recommendation or
take into account the particular investment objectives, financial situations, or needs of clients / prospective clients. Simi larly, this document does not have regard to
the specific investment objectives, financial situation/circumstances and the particular needs of any specific person who may receive this document. The securities
discussed in this report may not be suitable for all investors. The appropriateness of a particular investment or strategy wi ll depend on an investor's individual
circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particular
circumstances and, if necessary, seek professional/financial advice. And such person shall be responsible for conducting his/her/their own investigation and analysis of
the information contained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document.
The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties
and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections
and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts
described in this report have been prepared solely by the authors of this report independently of the Company. These projections and forecasts were not prepared with
a view toward compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an opinion or any other
form of assurance on these projections or forecasts. You should not regard the inclusion of the projections and forecasts des cribed herein as a representation or
warranty by VSL, its associates, the authors of this report or any other person that these projections or forecasts or their underlying assumptions will be achieved. For
these reasons, you should only consider the projections and forecasts described in this report after carefully evaluating all of the information in this report, including
the assumptions underlying such projections and forecasts. The price and value of the investments referred to in this document/material and the income from them
may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Future returns are not
guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth in projections . Forward-looking statements are not
predictions and may be subject to change without notice. We do not provide tax advice to our clients, and all investors are s trongly advised to consult regarding any
potential investment. VSL, the RA involved in the preparation of this research report and its associates accept no liabilities for any loss or damage of any kind arising out
of the use of this report. This report/document has been prepared by VSL, based upon information available to the public and sources, believed to be reliable. No
representation or warranty, express or implied is made that it is accurate or complete. VSL has reviewed the report and, in s o far as it includes current or historical
information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject
to change without notice and have no obligation to tell you when opinions or information in this report change. This report or recommendations or information
contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be reproduced, transmitted or published
by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by the public media without
the express written consent of VSL. This report or any portion hereof may not be printed, sold or distributed without the wri tten consent of VSL. This document does
not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the basis
of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to
the press or other media and may not be reproduced or redistributed to any other person. The opinions and projections express ed herein are entirely those of the
author and are given as part of the normal research activity of VSL and are given as of this date and are subject to change without notice. Any opinion estimate or
projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will be consistent with any such opinions,
estimate or projection. This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or
any of its directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors
or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other person accepts
any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. The information contained herein
is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this
communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives
Segments” as prescribed by Securities and Exchange Board of India before investing in Securities Market.

Ventura Securities Limited - SEBI Registration No.: INH000001634

Corporate Office: I-Think Techno Campus, 8th Floor, ‘B’ Wing, Off Pokhran Road No 2, Eastern Express Highway, Thane (W) – 400608

23 | P a g e ( 6 t h J u n e , 2 1 ) For any further query, please email us on research@[Link]