team 6 -axis bank

8/3/2019 Team 6 -Axis Bank

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Presented By Group 6


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Banking industry is growing at 18% pa

The banking index has grown at a CAGR of over 51 per cent sinceApril 2001 as compared to a 27 per cent growth in the marketindex for the same period

The total assets size has increased more than five times betweenMarch 2000 and March 2010, from US $ 250 billion to more than $1.4 trillion

Capital adequacy ratio, has also improved from 11.4% in 2000-01

to 14.6% in 2009-10

Deposit of SCBs as of March 26, 2010 was Rs.4492825 crore whileBank Credit stood at Rs.3244788 crore


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800 Of 1200 million people unbanked Global expansion opportunities Business opportunities for locals Technology up gradation


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Source: BCG


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Economic Factors

GDP

0

10

20

30

40

50

60

Services (IncludesBanking 6%)

Industry Agriculture

55.3

28.6

16.1

Banking Sector Contribution to GDP

Year 2011

Year GDP

2003 4.3

2004 8.3

2005 6.2

2006 8.4

2007 9.2

2008 9

2009 7.4

2010 7.4

2011 8.3

Source: www.Business.mapsofindia.com/india-gdp/sectorwise


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Inflation

9.78

13.725

9.286

7.692

5.691

7.269

3.32

3.018

4.4124.1583.394

0

2

4

6

8

10

12

14

16

2000 2002 2004 2006 2008 2010 2012

Inflation Rate

Inflation Rate

RBI measures

Government measures

Particulars Rates %

CRR 6

SLR 24

Repo rate 8.25

Reverse Repo 7.25

MSF 9.25

Source: Trading Economics


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Allowing banks to issue infra mutual funds

New banking licenses

Savings rate deregulation

RBI planning to make mandatory for foreign

branches to covert into subsidiary Lending to MFIs doesnt include in priority

sector lending.


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Public Vs Private


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Higher Slippages Higher Retail %

NPL Risk Private Vs Public Profitability (ROA) CASA Deposits Restructured Assets


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Incorporated in the year 1993 as UTI Bank Ltd First private banks to have begun operations in

1994 Listed on NSE, BSE and London Stock exchangeThe Bank operates in four segments: 1. Treasury 2. Retail banking 3. Corporate/wholesale banking 4. Other banking business.

Promoter

37%

Institution

43%

Non Promoter

Corp Holding

6%

Public & Other14%

Share holding pattern

93 109132

152121

142185

212175

228

307

361330

403

501

582562

532

656

765742 735

891

1020

0

200

400

600

800

1000

1200

Quarter 1 Quarter 2 Quarter 3 Quarter 4

FY06

FY07

FY08

FY09

FY10

FY11

Consistent net profit growth

Housing Loan

68%

Auto Loan11%

Non -Schematic

5%

Cards2%

Personal Loan

14%

Composition Of Retail Assets

873

548

226

374

50

854

1315

740

243

388

70

1033

0

200

400

600

800

1000

1200

1400

Large & Mid

Corporate credit

Treasury Agi & SME Busieness Banking Capital Market Retail Business

FY10

FY11

FEE Based Composition

Large Corporates

53%

SME

15%

Agri & Mfi

12%

Retail

20%

Loan Book Break


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Financial Highlights 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 CAGR(5 Years)

Total Deposit 58785.6 87626.22 117374.1 141300.2 189237.8 36.38%

Saving Bank Deposit 12125.88 19982.41 25822.12 33861.8 40850.31 38.33%

Current Account Deposit 11304.31 20044.58 24821.61 32167.74 36917.09 35.88%

Total Advances 36876.48 59661.14 81556.77 104341 142407.8 44.87%

Total Investment 26897.16 33705.1 46330.35 55974.82 71991.62 27.31%

Net Interest Income 1468.33 2585.35 3686.21 5004.49 6562.99 43.51%

Other Income 1010.11 1795.49 2896.88 3945.78 4632.13 44.72%

Operating Profit 1263.85 2225.92 3724.88 5240.55 6415.69 45.21%

Net Profit 659.03 1071.03 1815.36 2514.53 3388.49 47.52%


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Banks No. of Branches No. of ATM ATM to Branches- X

Axis Bank 1281 6270 4.9x

HDFC Bank 2000 6369 3.2 x

ICICI Bank 2533 6810 2.7 x

Union Bank 3015 2634 0.87 x

PNB 5161 5050 0.97 x

BOB 3469 1561 0.44 x


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Column1 Axis HDFC ICICI Union Bank PNB BOB

Market Cap 45,479.88 1,10,449.72 1,03,342.75 15,238.14 30,623.06 29,914.45

Market Price 1,103.30 473.25 896.8 240 966 761

Assets 2,42,713.00 406223 277352 235984 378385 358397

NII 15,154 25294 19928 16432 26986 21885

ROA 1.6 1.57 1.34 0.97 1.31 1.33

RoE 20.3 15.47 9.35 20.9 22.13 20.2

CAR 12.65 16.22 19.5 12.95 12.42 14.52

Book value 460.93 108.75 478 176.14 632.48 534.43

EPS 82.95 17.8 44.73 32.77 139.94 107.98

P- Bv 2.39 4.35 1.88 1.36 1.52 1.43

PE 13.30 26.59 20.05 7.32 6.90 7.05

NET NPA 0.3 0.2 1.1 0.6 0.8 0.3


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Well balanced loan book

Strong Casa Strong Financial health and assest quality

Strong fees based income

Enam acquisition strong strategic fit

Pan India Presence with superior service level


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P/L Account FY10 FY11 FY12e FY13e FY14e

Net Interest income 50045 65630 81040.13 104628.65 128073.35

YOY growth % 35.80% 31.14 23.48 29.11 22.41

Non Interest Income 39458 46321 56728.09 70877.48 86759.37

YOY growth 35.80% 17.39 22.47 24.94 22.41

Total Net Income 89503 111951 137768.21 175506.13 214832.71

Total Operating Expenses 37054.2 47803.1 59515.87 77398.20 95600.56

YOY growth 30% 29.01 24.50 30.05 23.52

Employee Expenses 12561.39 16157.44 20116.36 26160.59 32312.99

Other Operating Expense 24492.9 31645.6 39399.50 51237.61 63287.57

Pre- Provision Profit 52406.0 64157.0 78252.34 98107.93 119232.16

Provision & Contingencies 13888 12800 15743.00 19804.00 24755.00

Profit Before Tax 38517 51357 62509.34 78303.93 94477.16

Taxes 13372 17472 21253.18 26623.33 32122.23

Net profit 25145 33885 41256.17 51680.59 62354.92

Balance Sheet FY10 FY11 FY12e FY13e FY14e

Equity Share Capital 4052 4106 4120 4120 4120

Reserves & Surplus 156393 185883 220549 265640 321405

Networth 160445 189989 224669 269759 325524

Deposit 1413002 1892378 2342234 2927792 3659740

Borrowing 171695 262679 315214 362496 416870

Other Liabilities & Provision 61337 82089 123124 145117 159119

Total Liabilities 1806479 2427135 3005240 3705164 4561253

Cash & Bank Balance 152064 214087 229351 251767 347662

Investments 559748 719916 921240 1149996 1349996

Loans 1043431 1424078 1780098 2225122 2781402

Fixed Assets 12224 22732 25914 27210 28571

Other Assests 39010 46321 48637 51069 53622

Total Assets 1806478 2427135 3005240 3705164 4561253

Loan Growth 27.90% 36.50% 25% 25% 25%

Net Interest Income % 3 3.1 3 3.1 3.1

Non Interest Income 2.40% 2.20% 2.10% 2.10% 2.10%

Loan /Deposit 73.80% 75.30% 76% 76% 76%


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Valuation Method Weights Target Price

P/BV (2.5xFy12e) 40 1362.5

PE (14x FY12e) 20 1400

DCF 20 1311

EV/EBIDTA 20 1344

Weighted Average 1356

Cmp 1089

Upside(%) 24.5

Valuation ratio FY10 FY11 FY12e FY13e FY14e

BV 395.96 462.71 545.35 654.80 790.17

P/BV 2.75 2.35 2.00 1.66 1.38

EPS 62.06 82.53 100.14 125.45 151.36

P/E 17.55 13.20 10.87 8.68 7.19

By using weighted valuation of P/BV , PE , DCF and EV/EBIDTA method we arrive at attarget price of RS 1356 (upside of 24.5% from CMP).


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team 6 -axis bank

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