Axis bank is one of the largest private sector banks in the country after ICICI Bank and HDFC Bank with an asset base of Rs. 4,94,798 crores and a network of 4,050 branches as of FY19.
Post aggressive clean-up we expect the credit costs to revert to long term average of ~80 bps, as compared to FY17-19 average of more than 200 bps, thereby aiding the improvement in return on assets and return on equity substantially over the next 2 years.
Post clean up, the bank has the potential to deliver an earnings CAGR of 65% for the period FY19-21E thereby providing an opportunity to benefit from earnings growth as well as P/E re-rating.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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