27 April 2016
4QFY16 Results Update | Sector: Financials
Axis Bank
Buy
BSE SENSEX
26,007
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm/ Vol m
Free float (%)
S&P CNX
7,963
AXSB IN
2,383.4
1,145.1 / 17.2
613/367
7/3/-4
4,612.8
70.1
CMP: INR481
TP: INR525(+9%)
Mixed performance; Weak outlook; Cut earnings by ~10% for FY17/18
Financials & Valuations (INR b)
Y/E Mar
2016 2017E 2018E
NII
168.3 189.1 220.7
OP
161.0 184.2 213.3
NP
82.2
83.3
97.7
NIM (%)
3.8
3.7
3.6
EPS (INR)
34.5
35.0
41.0
EPS Gr. (%)
11.2
1.3
17.2
BV/Sh. (INR)
223
251
285
ABV/Sh. (INR)
215
234
266
RoE (%)
16.8
14.7
15.2
RoA (%)
1.7
1.5
1.4
Payout (%)
15.0
17.6
17.6
Valuations
P/E(X)
13.9
13.7
11.7
P/BV (X)
2.2
1.9
1.7
P/ABV (X)
2.2
2.1
1.8
Div. Yield (%)
1.0
1.1
1.3
Axis Bank’s (AXSB) 4QFY16 PAT at INR21.5b was flat QoQ and YoY basis (9%
miss). While reported PPoP of INR44b (+23% YoY, 12% QoQ) was inline, higher
than expected provisions led to PBT miss of 9%. With the benefit of
repatriation gain on foreign operations (INR1.7b) and strong recoveries
(INR830m), AXSB made INR3b of contingency provisions.
Asset quality outlook challenging:
AXSB has given additional disclosure on
corporate lending watch list, identifying INR226b of potential stress (6.7% of
loans, ~14% of corporate loans). Management expects ~60 % of the watch list
accounts to flow into NPA over the next 8 quarters (slightly higher proportion
in 1HFY17). Overall we expect 150bp/125bp credit costs for FY17/18E and with
significant rise in GNPA expected (3% v/s 1.8%).
Guidance for FY17:
a) NIM - 3.6%+, (b) C/I ratio of <40%, (c) High teens PPoP
growth, (d) credit costs 125bp (Base Case) -150bp (adverse case) – factors in
benefit of contingency provision reversal if any, (e) PCR at similar levels (~70%),
(f) loan growth of 18-20%, (g) CASA ratio 40%, (h) 350-400 new branches,
Other highlights:
1) CET1 ratio remains healthy at 12.51% (+44bp YoY), 2) NIMs
improve QoQ by ~20bp to ~4%, and 3) Avg. CASA ratio remained stable at 40%.
Valuation and view:
Our earnings estimate at PPoP level are unchanged
however, higher than expected asset quality stress is leading us to downgrade
earnings by ~10% each for FY17/18E. AXSB has INR3.8b of contingency
provisions which will provide some buffer to earnings in FY17. AXSB has utilized
the moderate growth phase to build capacity and is geared to ride the next
growth cycle with strong capitalization (12.5% Tier I), expanding liability
franchise (2,904 branches—17% CAGR over FY12-16). We expect 1.5% RoA and
~15% RoE over FY17/18E v/s 1.6% RoA and ~17% RoE previously. Based on
residual income model our target price is INR525 (1.8x FY18 BV).
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415
AS Venkata Krishnan
(A.Krishnan@MotilalOswal.com); +91 22 3010 2603 /
Dhaval Gada
(Dhaval.Gada@MotilalOswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Axis Bank
Exhibit 1: Quarterly Performance
Y/E March
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
4QFY16A
45,526
20
26,940
72,466
28,481
43,985
10
11,683
32,302
10,759
21,543
-1
4QFY16E
42,122
11
28,394
70,516
26,710
43,806
9
8,433
35,373
11,606
23,767
9
Var. (%)
8
-5
3
7
0
39
-9
-7
-9
Credit costs in-line; bank created INR3b of contingency provisions
Comments
Strong margin performance (+20bp QoQ); ahead of expectation
Lower than expected core fee growth
Higher than expected; significant acceleration in pace of branch
expansion (315 branches added in FY16 v/s 187 in FY15)
Healthy core PPoP growth was offset by higher provisions
Source: Company, MOSL
100% of potential stress in
corporate segment rated
BBB or below; overall share
of BBB or below loans
stands at 38%
Bank identifies ~14% of corporate loans as potential additional stress
Management has identified additional INR226b of large/mid corporate exposure
(~13% of corporate customer assets) which remain potential areas of stress in
the overall corporate book. This is over and above the full recognition of
~INR10-11b impairment from RBI’s asset quality review;
100% of potential stress is below A rated or unrated. However, overall share of
such loans stand at ~38% of the corporate loans. Hence, 2/3
rd
of the below A
rated or unrated corporate book is already identified for potential stress.
Overall management expects 60% of INR226b to slip into NPA category over
next eight quarters; therefore credit costs guidance remains elevated for FY17 at
125-150bp – factors in benefit of contingency provision reversal if any and PCR
at ~70% level
AXSB would have already recognized 9-10% of corporate loans as new stress
loans during FY16, assuming 90% of new stress loans coming from corporate
segment (which in our view would be from BBB and below).
Fresh restructuring: In 4QFY16, INR9.26b (one account led by shift in DCCO); for
FY16 INR22.7b of which INR19.5b were on account of shift in DCCO
Relapse from restructured loans were INR3.96b during the quarter
AXSB wrote-off INR3.3b loans v/s INR6.5b a quarter ago. Upgrades and
recoveries were at INR7.8b (INR1.6b in 2Q). Resultantly, GNPA in absolute terms
increased 6% QoQ and in percentage terms stood at 1.7% of customer assets
(flat QoQ).
Provision coverage ratio improved to 58.6% (v/s 56.1% in 3QFY16).
27 April 2016
2

Axis Bank
Exhibit 2:
Corporate Lending Watch List at the end of 4QFY16 was around INR226b
Source: MOSL, Company
Fee growth moderates – Large and mid- corporate fee growth tapers
Overall fee income growth remains moderate at 6% YoY v/s 12% YoY in 3Q.
While retail fee growth (14% YoY v/s 15% YoY) remains healthy; traction on
corporate fee growth (-1% YoY v/s 12% in 3Q) decelerated
Fee income growth in Agri/SME segments was +6% YoY v/s -7% YoY in 3QFY16
Business banking grew by 143% YoY (-4% QoQ)
Strong loan growth driven by retail and corporate segments
Retail loans grew 24% YoY (+10% QoQ) and forms 41% of the loan book. Within
retail segment, strong growth was witnessed across the board – all segments
growing 5-25% QoQ
Housing portfolio increased 16% YoY, while Agri segment 31% YoY. Auto loans
grew +39% YoY.
Corporate book grew 22% YoY (+4% QoQ) led by strong growth in real estate
(~32% QoQ), trade (~15% QoQ) and Engineering (~15% QoQ) – based on fund
based exposure; however, ~80% of incremental growth in A and above rated
corporate.
Other highlights
Period end CASA growth increased to 17% YoY led by 20%/13% YoY SA/CA
growth. Avg. CASA ratio was stable at 40%,
Cost to core income continues to remain healthy at 41.8% v/s 41.6% in 3QFY16
(41.8% in 4QFY15)
CET1 ratio improved QoQ to 12.51%,
One accounts was rescheduled under 5:25 scheme amounting to INR1.7b and
SDR was invoked on four restructured account amounting to INR2.05b,
27 April 2016
3

Axis Bank
Conference call highlights
Guidance
(a) 3.6%+ NIM for FY17 (no meaningful impact of MCLR), (b) Below 40% cost to
income ratio for FY17, (c) Plan to open 350-400 new branches v/s 315 in FY16, (d)
Credit growth 18-20% with mid-20s retail loan growth, (e) CASA ratio 40%, (f) High
teens PPoP growth, (g) credit costs 125-150bp, (h) provision coverage at similar
levels, (i) Plan to take share of unsecured loans to 15% of retail loans over next 2-3
years, (j) Fee growth to remain sluggish in the near term
Asset quality related
Asset quality position has not improved on the ground
Economic activity slower than earlier expectation
No slippage on second round impact of AQR in 4QFY16
Bank sold INR3.49b to ARC for sales consideration of INR1.1b (INR250m cash
and balance in security receipts)
Fresh restructuring: In 4QFY16, INR9.26b (one account led by shift in DCCO); for
FY16 INR22.7b of which INR19.5b were on account of shift in DCCO
Relapse from restructured loans were INR3.96b
Watch list INR226.3b outstanding (47% is towards power and iron and steel
sector); this based on existing fund based exposure
Slippages: SME INR1.61b and Retail INR2.4b
Recoveries/Upgrade: SME INR450m and Retail INR1.6b
Provisions: INR6.06b NPA, INR2.57b of standard asset and un-hedged exposure,
INR220m SDR provision, INR3b of contingency provisions; standard asset
provisions include INR1.05b related to Punjab food corp.
Security receipts outstanding: Gross book value INR8.85b and net book value
INR7.71b (depreciation pre-FY15 sale)
60% of Iron and Steel exposure to A and above
Outstanding SDR INR5.75b and 5:25 refinancing INR37.4b; these are all standard
exposures
P&L related
Incremental employee addition largely in business development / customer
acquisition team
Overall NIM was 3.95%; Domestic NIM 4.24%
Lower slippages during 4QFY16 led to lower interest income reversals thereby
supporting margins
Other income: dividend from subsidiaries INR770m, exchange gains INR1.69b
(v/s INR1.56b in 4QFY15) and INR830m cash recoveries
Other highlights
79% of new sanctions are to companies rated A and above
Fourth largest credit card issuer in India
97% of credit cards to existing customers
80% of unsecured loans to existing customers
40% YoY growth in credit card spends
Axis AMC saw +42% YoY in average AUM; 0.6m customer addition
Tier 1 ratio at 12.51%
27 April 2016
4

Axis Bank
Valuation and view
Reiterate
Buy
with a target
price of INR525 (1.8x FY18
BV)
Our earnings estimate at PPoP level are unchanged however, higher than
expected asset quality stress is leading us to downgrade earnings by ~10% each
for FY17/18E. AXSB has INR3.8b of contingency provisions which will provide
some buffer to earnings in FY17.
Additional disclosures on the asset quality provide clarity over the potential
stress on the balance sheet. Management guidance on the credit cost factors in
conservative estimate of 70% PCR and fairly high slippages on the total watch
list accounts. Our back of the envelope calculation suggest that guidance factor
in Iron and steel non-performing loans could be ~50% and Power of ~25%.
The bank is geared up to ride the next growth cycle with (1) strong capitalization
(12.5% CET I), healthy ROA (1.5%) and expanding liability franchise (2,904
branches – 15%+ CAGR over FY12-15). Leveraging on the strong distribution
network AXSB increased the share of non-wholesale deposits to ~80% as
compared 59% in FY11 and retail loans now form 41% of loans (v/s 19% in FY11).
Increased share of retail loans and strong SME business would help reduce
revenue volatility.
We expect PAT CAGR of ~13% over FY16/19. Stock trades at FY18 PE and PBV of
11.7x/1.7x. Reiterate
Buy
with Residual income growth based target price of
INR525 (1.8x FY18 BV). Key assumptions are a) Risk Free rate of 7.5% b) Beta of
1.35x c) Risk Premium of 5% d) average growth of ~13% over FY15-35E and e)
Terminal growth rate of 5%.
Risk to our earnings estimate
– a. Trade-off between loan growth and margins
putting pressure on core revenues, b. additional large lumpy slippage, c. higher
than expected opex growth and d. indirect impact of RBI directed recognition by
peer banks.
Exhibit 4: One year forward P/E
Avg(x)
Min(x)
4.0
2.1
1.7
27
21
15
9
3
12.6
5.7
10.7
PE (x)
Peak(x)
Avg(x)
Min(x)
23.6
Exhibit 3: One year forward P/BV
4.8
3.6
2.4
1.2
0.0
0.9
PB (x)
Peak(x)
Source: Company, MOSL
Source: Company, MOSL
27 April 2016
5

Axis Bank
Exhibit 5:
We cut FY17/18 estimates by ~10% led by higher credit costs
INR b
Old Estimates
FY16
FY17
FY18
Net Interest Income 164.9 186.5 220.2
Other Income
95.2
113.8 133.7
Total Income
260.1 300.3 353.9
Operating Expenses 99.2
116.1 135.9
Operating Profits
160.9 184.2 218.0
Provisions
33.8
44.5
51.2
PBT
127.0 139.7 166.9
Tax
42.5
47.5
56.7
PAT
84.5
92.2
110.1
Loans
3,317 3,980 4,856
Deposits
3,547 4,256 5,193
Margins (%)
3.69
3.67
3.63
Credit Cost (%)
1.00
1.15
1.10
RoA (%)
1.7
1.6
1.6
RoE (%)
17.5
16.6
17.3
Revised Estimates
FY16
FY17
FY18
168.3 189.1 220.7
93.7
111.2 129.6
262.0 300.4 350.3
101.0 116.2 137.1
161.0 184.2 213.3
37.1
58.0
65.3
123.9 126.2 148.0
41.7
42.9
50.3
82.2
83.3
97.7
3,388 4,065 4,960
3,580 4,296 5,241
3.80
3.68
3.62
1.00
1.64
1.39
1.7
1.5
1.4
16.8
14.7
15.2
Change (%)
FY16 FY17 FY18
2.1
1.4
0.2
-1.5 -2.3 -3.0
0.7
0.0
-1.0
1.8
0.0
0.9
0.1
0.0
-2.2
9.6 30.4 27.5
-2.4 -9.7 -11.3
-2.0 -9.7 -11.3
-2.6 -9.7 -11.3
2.1
2.1
2.1
0.9
0.9
0.9
Source: MOSL, Company
Exhibit 6: DuPont Analysis - Expected rise in credit costs to result in sub 1.5% RoA and ~15% RoE
Y/E MARCH
Net Interest Income
Fee income
Fee to core Income
Core Income
Operating Expenses
Cost to Core Income
Employee cost
Employee to total exp
Others
Core Operating Profit
Trading and others
Operating Profit
Provisions
NPA
Others
PBT
Tax
Tax Rate
RoA
Leverage (x)
RoE
FY09
2.87
1.90
39.9
4.77
2.22
46.6
0.78
34.9
1.45
2.55
0.35
2.90
0.73
0.70
0.03
2.16
0.75
34.8
1.41
13.6
19.1
FY10
3.05
1.78
36.9
4.83
2.26
46.8
0.76
33.9
1.49
2.57
0.62
3.19
0.85
0.86
-0.01
2.35
0.81
34.7
1.53
12.5
19.2
FY11
3.10
1.79
36.6
4.89
2.26
46.2
0.76
33.8
1.50
2.63
0.40
3.03
0.60
0.54
0.07
2.43
0.83
34.0
1.60
12.1
19.3
FY12
3.04
1.79
37.1
4.82
2.27
47.1
0.79
34.6
1.49
2.55
0.26
2.81
0.43
0.42
0.02
2.38
0.77
32.5
1.61
12.6
20.3
FY13
3.09
1.76
36.4
4.85
2.21
45.5
0.76
34.4
1.45
2.64
0.33
2.97
0.56
0.47
0.09
2.41
0.76
31.4
1.65
11.2
18.5
FY14
3.30
1.65
33.4
4.96
2.18
44.0
0.72
32.9
1.46
2.77
0.39
3.17
0.58
0.49
0.09
2.58
0.87
33.5
1.72
10.1
17.4
FY15
3.37
1.60
32.3
4.97
2.18
43.8
0.74
33.8
1.44
2.79
0.38
3.17
0.55
0.50
0.05
2.62
0.88
33.5
1.74
10.2
17.8
FY16
3.41
1.52
30.8
4.93
2.05
41.5
0.68
33.4
1.36
2.88
0.38
3.26
0.75
0.63
0.13
2.51
0.84
33.6
1.67
10.1
16.8
FY17E
3.30
1.53
31.7
4.83
2.03
42.0
0.68
33.4
1.35
2.80
0.41
3.22
1.01
1.06
-0.05
2.20
0.75
34.0
1.45
10.1
14.7
FY18E
3.24
1.51
31.9
4.76
2.01
42.3
0.67
33.4
1.34
2.74
0.39
3.13
0.96
0.92
0.04
2.17
0.74
34.0
1.43
10.6
15.2
Source: Company, MOSL
27 April 2016
6

Axis Bank
Exhibit 7: Quarterly DuPont Analysis - Healthy core income performance offset by creation of contingency provisions (%)
4QFY13 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16
Net Interest Income
3.23
3.40
3.43
3.36
3.41
3.47
3.64
3.52
3.44
3.55
3.51
3.44
3.56
Fee based income
1.96
1.56
1.67
1.64
1.92
1.45
1.64
1.65
1.92
1.36
1.57
1.56
1.76
Fee to Core Income
37.8
31.5
32.8
32.8
36.0
29.4
31.1
32.0
35.9
27.7
30.9
31.2
33.1
Core Income
5.20
4.96
5.10
5.00
5.33
4.92
5.29
5.17
5.37
4.91
5.08
4.99
5.33
Operating Expenses
2.27
2.14
2.28
2.27
2.30
2.21
2.39
2.27
2.24
1.98
2.14
2.08
2.23
Cost to Core Income
43.7
43.1
44.7
45.3
43.1
44.9
45.2
43.9
41.8
40.4
42.1
41.6
41.8
Employee expenses
0.73
0.76
0.75
0.74
0.71
0.79
0.81
0.76
0.72
0.71
0.72
0.68
0.71
Other
1.54
1.38
1.53
1.53
1.59
1.42
1.57
1.51
1.52
1.27
1.42
1.39
1.52
Core Operating Profits
2.92
2.82
2.82
2.73
3.03
2.71
2.90
2.90
3.13
2.93
2.94
2.92
3.10
Trading and others
0.47
0.55
0.39
0.21
0.47
0.33
0.37
0.35
0.51
0.65
0.20
0.37
0.34
Operating Profits
3.40
3.37
3.21
2.94
3.50
3.04
3.27
3.25
3.64
3.58
3.14
3.29
3.44
Provisions
0.72
0.84
0.80
0.23
0.54
0.41
0.75
0.50
0.64
0.98
0.61
0.59
0.91
NPA
0.34
0.71
0.57
0.42
0.35
0.42
0.72
0.55
0.45
0.76
0.55
0.58
0.69
Others
0.38
0.14
0.23
-0.19
0.19
-0.02
0.03
-0.05
0.19
0.22
0.06
0.01
0.22
PBT
2.67
2.53
2.41
2.72
2.95
2.63
2.52
2.75
2.99
2.60
2.53
2.70
2.53
Taxes
0.79
0.86
0.82
0.91
0.97
0.88
0.85
0.89
1.02
0.87
0.87
0.91
0.84
Tax Rate
29.5
33.9
33.9
33.5
32.8
33.6
33.9
32.3
34.0
33.4
34.4
33.5
33.3
ROA
1.89
1.67
1.59
1.81
1.98
1.75
1.66
1.86
1.98
1.73
1.66
1.80
1.69
Leverage (x)
11.0
9.9
9.6
9.6
9.8
9.7
9.5
9.5
10.0
10.0
9.7
9.7
9.8
ROE
20.7
16.6
15.3
17.4
19.4
17.0
15.8
17.8
19.7
17.3
16.0
17.4
16.5
Source: Company, MOSL
27 April 2016
7

Axis Bank
Story in charts
Exhibit 8: Reported NIM remained strong at 3.97%;
Management expects to maintain 3.6%+ NIM in FY17
NIMs (%)
3.8 3.8
3.3
3.7
3.9 3.8
3.7
3.9 3.9 4.0 3.9 3.8 3.8 3.9
3.8
4.0
Exhibit 9: Cost of funds declined 2bp QoQ, 42bp YoY (%)
3.6
3.4 3.5
3.6
Source: Company, MOSL
Source: Company, MOSL
Exhibit 10: Loan growth remains healthy at 21%YoY
Loans (INR b)
YoY Growth (%)
Exhibit 11: Improvement in liability mix since FY12 (%)
Bulk Dep. Proportion
46
37
28
19
10
Average Daily CASA Ratio
30
23 22 23 23 21 21
23 21
21 27 20 19
16 16 17 18 17 16 20
Source: Company, MOSL
Source: Company, MOSL
Exhibit 12: Core fee income growth remains subdued at +6%
YoY (v/s +12% YoY in 3QFY16)
Core Fee Income (INR m)
1.8 1.9 1.9
1.9
Core Fee as % of avg assets
Exhibit 13: Strong control over cost despite focus on retail
Cost to avg assets
Cost to C/Income
1.9
1.8 1.8 2.0 1.7
1.8
1.6 1.9 1.6 1.7
1.6
1.6 1.6
1.6
1.4
1.4
11 11 12 13 12 13 14 16 13 14 15 18 14 16 17 21 16 18 19 23
Source: Company, MOSL
Source: Company, MOSL
27 April 2016
8

Axis Bank
Story in charts
Exhibit 14: Slippages decline QoQ; however, asset quality
guidance points towards weak outlook
Slippages (INR b)
Slippage Ratio (%)
2.1
1.3
1.1
1.0
3.2
2.1
Exhibit 15: GNPA ratio flat QoQ; PCR incl. w/o remains
stable
Gross NPA (%)
Net NPA (%)
1.8
1.8 1.71.4 1.4 1.5 1.6 1.4
1.3
1.1
0.9
1.8
1.3
0.6
Source: Company, MOSL
Source: Company, MOSL
Exhibit 16: Fresh restructuring in 3Q was INR9.3b led by shift
in DCCO; relapse from restructured loans was INR4b
Restructured Portfolio (INR b)
Rest Port as a % of customer assets
2.7 2.8 2.7
2.5 2.5 2.4
2.3 2.3
2.1 2.4
2.0 2.0 2.1 1.9 1.9 1.9
Exhibit 17: Gross stress additions remains elevated
Gross Stress Addition (INR b)
As a % of Loans (annualized)
2.9 2.7
1.5
3.1 3.3
2.7 2.4
2.8
3.2
3.8
2.8 2.9
2.2
2.9
1.6
3.7
3.3
1.7
3.4 3.4
1.4 1.5 1.6
1.6
Source: Company, MOSL
Source: Company, MOSL
Exhibit 18: Management expects 125-150bp credit costs in
FY17
Credit costs (%)
2.8
2.1
1.4
0.7
0.0
1.2
2.4
Exhibit 19: Added 99 branches during the quarter
Source: Company, MOSL
Source: Company, MOSL
27 April 2016
9

Axis Bank
Exhibit 20: Quarterly Snapshot
FY15
INR m
Profit and Loss
Net Interest Income
Other Income
Trading profits
Fee Income
Miscellaneous Income
Total Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
PAT
Asset Quality
GNPA
NNPA
GNPA (%)
NNPA (%)
PCR (Calculated, %)
PCR (Reported, %)
Slippages
Slippage Ratio
Prov. for NPA in qtr
Credit Cost
Restructured loans
% of Loans
Ratios (%)
Fees to Total Income
Cost to Core Income
Tax Rate
Loan/Deposit
Margins - Cal (%)
Yield on loans
Yield On Investments
Yield on Funds
Cost of funds
Margins
Margins - Reported (%)
Cost of Funds
Margins
Franchise
Branches
ATM
1Q
33,105
16,911
2,603
13,780
527
50,015
21,059
7,518
13,541
28,957
3,866
25,091
8,423
16,668
2Q
35,249
19,476
2,708
15,910
859
54,725
23,102
7,860
15,242
31,623
7,250
24,373
8,266
16,107
3Q
35,896
20,391
3,290
16,860
241
56,286
23,140
7,785
15,356
33,146
5,072
28,075
9,077
18,998
4Q
37,992
26,873
2,749
21,240
2,885
64,866
24,737
7,988
16,749
40,129
7,098
33,031
11,225
21,806
1Q
40,562
22,983
6,465
15,508
1,010
63,545
22,624
8,093
14,532
40,921
11,218
29,703
9,919
19,784
2Q
40,621
20,414
1,675
18,130
609
61,035
24,755
8,293
16,462
36,280
7,072
29,208
10,051
19,156
FY16
3Q
41,621
23,378
3,378
18,847
1,153
64,998
25,148
8,295
16,852
39,851
7,126
32,725
10,972
21,753
4Q
45,526
26,940
951
22,538
3,451
72,466
28,481
9,079
19,402
43,985
11,683
32,302
10,759
21,543
Variation (%)
QoQ
9
15
-72
20
199
11
13
9
15
10
64
-1
-2
-1
6
0
-1
-5
249
-29
-110
-4
-8.0
4
-7
YoY
20
0
-65
6
20
12
15
14
16
10
65
-2
-4
-1
48
92
33
26
-940
142
104
63
19.3
-1
-52
28,550
1.4
17,070
0.7
53,250
2.1
26,790
0.9
87
71.0
57
19.8
Cumulative Numbers
YoY
FY15
FY16
Gr (%)
142,241
83,650
11,349
67,790
4,511
225,892
92,037
31,150
60,888
133,854
23,286
110,568
36,990
73,578
168,330
93,715
12,469
75,023
6,223
262,044
101,008
33,760
67,248
161,036
37,099
123,938
41,701
82,237
18
12
10
11
38
16
10
8
10
20
59
12
13
12
34,633 36,131 39,016 41,102
11,135 11,798 12,507 13,167
1.3
1.3
1.3
1.3
0.4
0.4
0.4
0.4
68
67
68
68
77
78
78
78
6,260 9,110 7,080 6,100
1.3
1.8
1.3
1.1
3,350 6,320 3,690 3,710
0.6
1.1
0.6
0.5
62,890 66,900 68,080 81,660
2.7
2.8
2.6
2.9
27.6
44.9
33.6
84.8
10.6
7.0
9.4
6.1
3.7
6.2
3.9
29.1
45.2
33.9
85.4
10.6
7.8
9.7
6.1
4.0
6.2
4.0
30.0
43.9
32.3
89.5
10.3
8.0
9.7
6.0
3.9
6.2
3.9
32.7
41.8
34.0
87.2
10.4
8.4
9.6
6.2
3.8
6.3
3.8
42,512 44,511 57,241 60,875
14,613 15,436 25,141 25,221
1.4
1.4
1.7
1.7
0.5
0.5
0.8
0.7
66
65
56
59
78
78
72
72
11,860 5,830 20,820 14,740
2.1
1.0
3.2
2.1
8,240 6,190 6,300 6,060
1.2
0.8
0.8
0.7
85,150 84,260 77,450 80,720
3.0
2.8
2.5
2.4
24.4
40.4
33.4
92.5
10.0
8.2
9.5
5.9
3.9
6.1
3.8
29.7
42.1
34.4
92.0
10.1
7.9
9.6
5.9
3.9
6.0
3.9
29.0
41.6
33.5
93.2
9.8
8.0
9.4
5.8
3.8
5.9
3.8
31.1
41.8
33.3
94.6
9.9
8.2
9.5
5.7
4.0
5.8
4.0
30.0
43.8
33.5
28.6
41.5
33.6
8
15
14
-3
14
-2
18
-48
-24
-9
-44
21
-42
16
10.5
7.8
9.6
6.1
3.8
6.2
3.9
10.0
8.1
9.5
5.8
3.9
6.0
3.9
-52
28
-11
-25
4
-26
-4
2,421 2,505 2,558 2,589 2,589 2,743 2,805 2,904
12,930 13,146 12,874 12,355 12,179 12,352 12,631 12,743
Source: Company, MOSL
27 April 2016
10

Axis Bank
Exhibit 21: Quarterly Snapshot (continued)
FY14
INR b
Balance Sheet
Loans
Investments
Customer Assets
Deposits
Borrowings
Total Assets
Deposits Break Up
Retail Deposits
% of total Deposits
Other Deposits
% of total Deposits
Deposits Break Up
CASA Deposits
% of total Deposits
Savings
% of total Deposits
Current
% of total Deposits
Term Deposits
% of total Deposits
Ratings Profile
Large and Mid Corp
AAA
AA
A
BBB
<BBB and below
SME
SME1
SME2
SME3
SME4
SME 5-8
1Q
1,982
1,033
2,256
2,384
498
3,341
1,283
54
1,101
46
1,011
42
633
27
378
16
1,373
58
2Q
2,013
1,184
2,266
2,554
479
3,514
1,344
53
1,210
47
1,095
43
665
26
430
17
1,459
57
3Q
2,115
1,122
2,389
2,624
484
3,594
1,518
58
1,106
42
1,117
43
696
27
421
16
1,507
57
4Q
2,301
1,135
2,562
2,809
503
3,832
1,620
58
1,189
42
1,265
45
778
28
487
17
1,545
55
1Q
2,305
1,079
2,553
2,720
543
3,794
1,680
62
1,040
38
1,152
42
746
27
407
15
1,568
58
2Q
2,422
1,031
2,659
2,837
557
3,950
1,772
62
1,065
38
1,264
45
799
28
465
16
1,574
55
FY15
3Q
2,606
1,088
2,856
2,912
730
4,211
1,819
62
1,093
38
1,256
43
800
27
456
16
1,656
57
4Q
2,811
1,323
3,115
3,224
798
4,619
1,949
60
1,276
40
1,444
45
883
27
561
17
1,780
55
1Q
2,846
1,079
3,094
3,078
809
4,525
1,948
63
1,130
37
1,316
43
848
28
468
15
1,762
57
2Q
2,981
1,137
3,242
3,241
844
4,727
2,049
63
1,192
37
1,434
44
897
28
537
17
1,807
56
FY16
3Q
3,154
1,154
3,419
3,383
920
4,964
2,131
63
1,252
37
1,463
43
928
27
536
16
1,920
57
4Q
3,388
1,220
3,668
3,580
992
5,255
2,277
64
1,302
36
1,694
47
1,058
30
637
18
1,885
53
Variation (%)
QoQ
YoY
7
6
7
6
8
6
7
4
21
-8
18
11
24
14
17
2
16
14
19
-2
17
20
13
6
12
14
37
31
6
6
16
58
12
8
11
15
36
32
6
6
16
58
13
7
11
14
37
31
7
7
16
58
12
7
11
15
35
30
9
7
15
58
13
7
12
16
33
31
8
6
16
56
14
8
11
15
35
30
9
7
16
57
12
8
11
15
34
31
9
6
16
60
11
7
10
20
32
29
9
8
15
61
9
7
11
18
31
29
11
6
14
63
9
8
12
18
31
28
11
6
15
64
8
7
11
20
31
27
11
6
14
64
8
8
12
20
30
26
12
7
14
63
8
8
Source: Company, MOSL
27 April 2016
11

Axis Bank
Exhibit 22: Valuation summary
66
Rating
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
DCBB
FB
JKBK
SIB
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
OBC
INBK
CRPBK
ANDB
IDBI
DBNK
Public Aggregate
HDFC*
LICHF
DEWH
IHFL
GRHF
REPCO
RECL
POWF
SHTF
MMFS
BAF
MUTH
SKSM
NBFC Aggregate
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Neutral
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
CMP
(INR)
254
1,113
480
701
911
1,021
97
48
69
18
201
90
98
162
214
131
97
100
40
56
71
31
1,128
461
206
680
266
663
183
182
987
303
6,998
198
586
Mcap
EPS (INR)
P/E (x)
BV (INR)
P/BV (x)
RoA (%)
RoE (%)
(USDb) FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18
22.3
22.2 26.6 8.3
6.5
147 166 1.26 1.04 1.39 1.43 13.4 14.3
42.6
58.5 70.3 19.0 15.8 332 386 3.35 2.88 1.88 1.85 18.9 19.6
17.3
38.9 46.5 12.3 10.3 249 288 1.93 1.67 1.63 1.64 16.6 17.3
19.4
24.7 31.3 28.4 22.4 206 237 3.40 2.96 1.38 1.54 13.9 14.8
5.8
74.9 93.5 12.2 9.7
386 461 2.36 1.98 1.81 1.84 21.0 22.1
9.2
50.5 63.8 20.2 16.0 334 389 3.05 2.62 1.92 1.96 16.2 17.6
0.4
7.1
8.4 13.6 11.6
69
77
1.41 1.26 0.94 0.90 10.9 11.5
1.3
4.5
5.5 10.6 8.8
51
56
0.94 0.87 0.79 0.83 9.1 10.3
0.5
18.0 21.6 3.8
3.2
152 168 0.45 0.41 1.02 1.07 12.4 13.5
0.4
3.1
3.7
5.9
5.0
31
34
0.59 0.54 0.58 0.61 10.3 11.4
119.2
16.2 13.5
2.41 2.11
23.6
24.1 28.7 7.9
6.6
243 266 0.78 0.71 0.61 0.64 10.2 11.3
2.7
16.8 21.6 5.4
4.2
220 239 0.41 0.38 0.48 0.55 7.9
9.4
1.2
4.0 18.7 24.3 5.2
318 334 0.31 0.29 0.05 0.19 1.3
5.7
5.7
16.4 20.7 9.9
7.8
171 187 0.94 0.86 0.49 0.55 9.9 11.5
1.8
47.3 55.2 4.5
3.9
584 626 0.37 0.34 0.41 0.43 8.4
9.1
1.4
28.2 38.4 4.7
3.4
323 354 0.41 0.37 0.45 0.54 9.1 11.3
0.4
25.0 32.2 3.9
3.0
458 483 0.21 0.20 0.29 0.33 5.6
6.8
0.7
21.1 27.4 4.7
3.7
290 311 0.35 0.32 0.45 0.51 7.5
9.1
0.1
18.7 21.6 2.1
1.9
152 169 0.26 0.24 0.57 0.59 12.9 13.4
0.5
22.8 27.9 2.5
2.0
196 216 0.29 0.26 0.62 0.65 12.2 13.6
2.0
5.7
8.7 12.4 8.1
125 132 0.57 0.54 0.29 0.39 4.7
6.8
0.3
10.0 15.6 3.1
2.0
128 141 0.24 0.22 0.38 0.53 8.0 11.6
40.4
8.1
6.3
0.63 0.59
26.9
35
40
32.1 28.4 188 212 6.01 5.32 2.28 2.28 24.2 19.8
3.5
40
49
11.5 9.5
213 252 2.16 1.83 1.51 1.51 20.4 20.9
0.9
32
40
6.4
5.1
203 234 1.02 0.88 1.25 1.27 16.9 18.3
4.4
68
82
10.1 8.3
302 336 2.25 2.02 3.84 3.69 23.4 25.7
1.5
8
11
32.0 25.0
28
35
9.37 7.54 2.33 2.34 32.4 33.5
0.6
33
42
20.3 15.8 181 218 3.67 3.04 2.16 2.10 19.7 21.0
2.7
44
50
4.1
3.6
332 370 0.55 0.49 1.90 1.88 14.0 14.4
3.6
42
43
4.4
4.2
310 341 0.59 0.53 2.07 1.85 14.1 13.2
3.4
73
92
13.4 10.7 513 585 1.93 1.69 2.21 2.40 15.2 16.6
2.6
16
19
19.5 16.1 119 133 2.54 2.28 2.14 2.26 13.7 15.0
5.6
303 366 23.1 19.1 1,622 1,928 4.31 3.63 3.04 2.79 20.3 20.6
1.2
25
32
8.0
6.2
156 177 1.27 1.12 2.96 3.22 16.8 19.2
1.1
34
46
17.1 12.8 142 177 4.14 3.32 5.25 5.46 27.5 28.8
58.3
14.7 12.7
2.30 2.05
27 April 2016
12

Axis Bank
Financials and Valuations
Income Statement
Y/E March
Interest Income
Interest Expense
Net Interest Income
Change (%)
Non Interest Income
Net Income
Change (%)
Operating Expenses
Pre Provision Profits
Change (%)
Provisions (excl tax)
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Equity Dividend (Incl tax)
Core PPP*
Change (%)
*Core PPP is (NII+Fee income-Opex)
2012
219,946
139,769
80,177
22.2
54,202
134,380
20.0
60,071
74,309
15.8
11,430
62,878
20,456
32.5
42,422
25.2
7,701
70,662
23.4
2013
271,826
175,163
96,663
20.6
65,511
162,174
20.7
69,142
93,031
25.2
17,504
75,527
23,733
31.4
51,794
22.1
9,872
84,383
19.4
2014
306,412
186,895
119,517
23.6
74,052
193,569
19.4
79,008
114,561
23.1
21,075
93,486
31,310
33.5
62,177
20.0
11,011
109,446
29.7
2015
354,786
212,545
142,241
19.0
83,650
225,892
16.7
92,037
133,854
16.8
23,286
110,568
36,991
33.5
73,577
18.3
13,090
122,207
11.7
2016
409,880
241,551
168,330
18.3
93,715
262,044
16.0
101,008
161,036
20.3
37,099
123,938
41,701
33.6
82,237
11.8
12,335
146,369
19.8
2017E
455,637
266,488
189,149
12.4
111,208
300,357
14.6
116,159
184,197
14.4
57,963
126,234
42,920
34.0
83,315
1.3
14,622
165,030
12.7
2018E
530,944
310,251
220,694
16.7
129,637
350,331
16.6
137,068
213,263
15.8
65,272
147,991
50,317
34.0
97,674
17.2
17,142
191,595
16.1
(INR Million)
2019E
645,243
382,689
262,555
19.0
149,852
412,406
17.7
162,657
249,750
17.1
72,315
177,434
60,328
34.0
117,107
19.9
20,552
226,582
18.3
Balance Sheet
Y/E March
Equity Share Capital
Reserves & Surplus
Net Worth
Deposits
Change (%)
of which CASA Dep
Change (%)
Borrowings
Other Liabilities & Prov.
Total Liabilities
Current Assets
Investments
Change (%)
Loans
Change (%)
Fixed Assets
Other Assets
Total Assets
2012
4,132
223,953
228,085
2,201,043
16.3
914,220
17.6
340,717
86,433
2,856,278
139,339
931,921
29.4
1,697,595
19.2
22,593
64,829
2,856,278
2013
4,680
326,399
331,079
2,526,136
14.8
1,120,998
22.6
439,511
108,881
3,405,607
204,350
1,137,375
22.0
1,969,660
16.0
23,556
70,666
3,405,607
2014
4,698
377,506
382,205
2,809,446
11.2
1,264,623
12.8
502,909
137,889
3,832,449
282,387
1,135,484
-0.2
2,300,668
16.8
24,102
89,808
3,832,449
2015
4,741
442,024
446,765
3,224,419
14.8
1,444,003
14.2
797,583
150,557
4,619,324
360,990
1,175,502
3.5
2,810,830
22.2
25,143
246,858
4,619,324
2016
4,766
526,883
531,649
3,579,676
11.0
1,694,450
17.3
992,264
151,088
5,254,676
333,254
1,220,062
3.8
3,387,737
20.5
35,232
278,391
5,254,676
2017E
4,766
595,576
600,342
4,295,611
20.0
1,976,997
16.7
1,124,169
182,357
6,202,479
428,657
1,342,068
10.0
4,065,285
20.0
46,320
320,150
6,202,479
2018E
4,766
676,109
680,874
5,240,645
22.0
2,327,877
17.7
1,275,336
220,168
7,417,024
554,520
1,476,275
10.0
4,959,647
22.0
58,409
368,172
7,417,024
(INR Million)
2019E
4,766
772,663
777,429
6,524,603
24.5
2,758,313
18.5
1,432,140
266,342
9,000,514
682,157
1,623,903
10.0
6,199,559
25.0
71,497
423,398
9,000,514
Asset Quality
GNPA (INR m)
NNPA (INR m)
GNPA Ratio
NNPA Ratio
PCR (Excl Tech. write off)
PCR (Incl Tech. Write off)
E: MOSL Estimates
18,063
4,726
1.06
0.28
73.8
80.9
23,934
7,041
1.21
0.36
70.6
79.0
31,464
10,246
1.36
0.45
67.4
78.0
41,102
13,167
1.45
0.47
68.0
77.7
60,852
27,277
1.78
0.81
55.2
70.0
114,047
64,574
2.77
1.59
43.4
61.8
(%)
152,004
71,125
3.02
1.43
53.2
65.2
(%)
175,797
58,543
2.78
0.94
66.7
74.2
27 April 2016
13

Axis Bank
Financials and Valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield-Earning Assets
Avg. Yield on loans
Avg. Yield on Investments
Avg. Cost-Int. Bear. Liab.
Avg. Cost of Deposits
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
RoA
Int. Expense/Int.Income
Fee Income/Net Income
Non Int. Inc./Net Income
Efficiency Ratios (%)
Cost/Income*
Empl. Cost/Op. Exps.
Busi. per Empl. (INR m)
NP per Empl. (INR lac)
Asset-Liability Profile (%)
Loans/Deposit Ratio
CASA Ratio
Investment/Deposit Ratio
G-Sec/Investment Ratio
CAR
Tier 1
77.1
41.5
42.3
62.7
13.7
9.5
78.0
44.4
45.0
63.5
17.0
12.2
81.9
45.0
40.4
60.9
16.1
12.6
87.2
44.8
36.5
69.1
15.1
12.1
94.6
47.3
34.1
73.4
15.3
12.6
94.6
46.0
31.2
80.0
14.3
12.0
94.6
44.4
28.2
88.7
13.5
11.5
95.0
42.3
24.9
100.4
12.5
10.9
44.9
34.6
124.0
1.5
44.2
34.4
120.5
1.5
41.5
32.9
119.6
1.5
42.6
33.8
131.7
1.7
40.5
33.4
140.8
1.8
40.9
33.4
143.2
1.6
41.3
33.4
153.8
1.6
41.4
33.8
169.6
1.7
20.3
1.6
63.5
28.2
40.3
18.5
1.7
64.4
29.1
40.4
17.4
1.7
61.0
28.5
38.3
17.8
1.7
59.9
26.5
37.0
16.8
1.7
58.9
25.9
35.8
14.7
1.5
58.5
25.0
37.0
15.2
1.4
58.4
25.0
37.0
16.1
1.4
59.3
25.0
36.3
9.0
9.9
7.7
6.0
6.0
3.1
3.3
9.3
10.5
7.5
6.4
6.4
3.0
3.3
9.1
10.3
7.3
6.0
5.8
3.2
3.6
9.2
10.1
7.3
5.8
5.7
3.4
3.7
9.2
9.7
7.8
5.6
5.7
3.6
3.8
8.9
9.1
7.6
5.3
5.4
3.5
3.7
8.7
9.1
7.2
5.2
5.2
3.5
3.6
8.8
9.1
7.2
5.3
5.3
3.5
3.6
2012
2013
2014
2015
2016
2017E
2018E
2019E
Valuation
Book Value (INR)
Change (%)
Price-BV (x)
Adjusted BV (INR)
Price-ABV (x)
EPS (INR)
Change (%)
Price-Earnings (x)
Dividend Per Share (INR)
Dividend Yield (%)
E: MOSL Estimates
3.2
20.5
24.4
108.0
109.5
18.2
140.0
27.8
3.4
138.0
3.5
22.1
7.8
21.7
3.6
0.7
161.8
15.6
3.0
158.9
3.0
26.5
19.6
18.2
4.0
0.8
187.9
16.1
2.6
184.3
2.6
31.0
17.3
15.5
4.6
1.0
222.5
18.4
2.2
215.1
2.2
34.5
11.2
13.9
5.0
1.0
251.4
13.0
1.9
233.7
2.1
35.0
1.3
13.7
5.2
1.1
285.2
13.4
1.7
265.8
1.8
41.0
17.2
11.7
6.1
1.3
325.7
14.2
1.5
309.7
1.6
49.1
19.9
9.8
7.4
1.5
27 April 2016
14

Axis Bank
Corporate profile
Company description
Exhibit 1: Sensex rebased
Axis Bank (formerly known as UTI Bank) is one of
the largest new generation private sector banks in
India. The bank began its operations in 1994. Under
the leadership of Shikha Sharma (since 2009),
Managing Director & CEO of Axis Bank, the bank has
grown into a one stop solution bank with
established presence in Equity Broking and Asset
Management businesses as well. As on March 31,
2016, the bank had 2,904 branches and 12,743
ATMs spread across the country.
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Dec-15
29.9
15.8
44.2
10.0
Promoter
DII
FII
Others
Sep-15
29.5
14.5
46.0
9.9
Dec-14
28.2
11.4
52.3
8.1
Source: Capitaline
Exhibit 3: Top holders
Holder Name
ICICI Prudential Life Insurance Company Ltd
Prudential Icici Trust Ltd-Sensex Prudential
Iciciexchange Traded Fund-Securities
Reliance Capital Trustee Company Limited
A/C Reliance Growth Fund
Copthall Mauritius Investmen Ltd.
Hdfc Trustee Company Ltd-Hdfc Equity Fund
% Holding
2.5
1.8
1.6
1.4
1.4
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Sanjiv Misra
Shikha Sharma
V Srinivasan
Girish V Koliyote
Designation
Chairman
Managing Director & CEO
Deputy Managing Director
Company Secretary
Exhibit 5: Directors
Name
Prasad R Menon
Samir K Barua
Srinivasan Vishvanathan
V R Kaundinya
Rakesh Makhija
Name
Rohit Bhagat
Som Mittal
Usha Sangwan
B Babu Rao
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
S R Batliboi & Co LLP
Type
Statutory
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
35.0
41.0
Consensus
forecast
39.8
48.1
Variation
(%)
-12.2
-14.7
Source: Bloomberg
Source: Capitaline
27 April 2016
15

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Axis Bank
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AXIS BANK
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