Buy Axis Bank, target of Rs 630: Karvy
Karvy Stock Broking has recommended a buy rating on Axis Bank with a price target of Rs 630 in its April 15, 2009 research report.
“In 4th QFY09, we expect the bank to report 27% growth in net interest income (NII) to Rs 10.5 billion; in this quarter, margin could improve mainly due to reduced cost of funding. Though, we expect growth in advances and deposits to moderate and margin to slightly improve. We expect the bank to record growth of 44% in fee-based income to Rs 5.9 billion; during the quarter treasury gains would be minimal due to adverse condition in debt and equity markets. We estimate that the bank’s other income and total net income would grow by 14% and 22% respectively.”
“We expect NPA provisions of Rs 625 million compared to Rs 46 million in Q4FY08; we estimate the bank’s bottomline to grow by 29% (Y/Y) to Rs 4.7 billion. At current price the stock quotes at 1.6x FY2010 adjusted book value; we rate the stock as a BUY with a price target of Rs 630 at 2.2x adjusted book value FY2010,” says Karvy Stock Broking’s research report.
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