Markets after showing some resurgence has again on the back of global concerns again on Monday lowered by 350 points. Also, after Bank Nifty made a new high also was dragged lower, and when it comes to private sector banks, Axis Bank upon the stepping of new CEO Amitabh Chaudhry is marking that the stock is the right bet with his strategy that hints that the RoE target of 18% seems fairly achievable by FY22.
Below are highlighted few facts on the stock:
Private Bank’s expansion plans to place it at par with HDFC and ICICI Bank:
It has been made the case that the bank will continue its bank branches expansion plan to touch a number of 5,000- 5,500. Chaudhry said in the next three to four years, we will add 400 to 500 branches and once when the number of bank branches reaches the targeted level, the pace of expansion will be slowed down.
The bank recently marked its 25th year of operation with a branch opening at Kharadi in Pune.
Bank is on an aggressive path to lower the gap with the top private sector banking player:
In his presentation to the analyst, the new CEO said, "I did not come here and appear for the interview to remain No. 3. Let me put it that way". However his aggressive strategy does not seems to compromise on its assets.
Axis Bank shares have risen sharply this year:
In the current year so far, the third sector lender has risen sharply by 20%, at a time when other private sector players have just managed to gain around 9% during the corresponding time.
Bank has managed to improve its provision coverage ratio of 75%:
This has come after the bank has seen heavy loss in the FY 18 due to heavy risk but for now it has shun all the weakly rated loans and this has dragged the bank's slippages downwards.
Margins to go down given the interest rate scenario:
Given the interest rate trajectory and bank's focus on good quality credit, the margins will only go down going ahead. Also, some of the brokerages are of the view, that despite the bank's highly likely stance of delivering guidance for the long term, there remains a discreet view on its near to medium prospect.