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Buy Axis Bank, target of 1459: Angel Securities

By SiliconIndia | Friday, 23 April 2010, 00:11 Hrs

Bangalore: Angel Securities is bullish on Axis Bank and has recommended buy rating on the stock with a target of

1459. Recently, Axis Bank reported a net profit growth of 31.5 percent yoy, which was ahead of Angel's expectations, on the back of lower-than-estimated provisions for NPAs. The core business growth recorded a strong improvement, with advances and deposits growth of 27.9 percent and 20.4 percent respectively.

Axis Bank provides a suite of corporate and retail banking products and it operates in four segments: Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes investments in sovereign and corporate debt, equity and mutual funds, trading operations, derivative trading and foreign exchange operations on the account and for customers and central funding. The Retail Banking segment constitutes lending to individual/small business subject to the orientation, product and granularity criterion. Retail Banking activities also include liability products, card services, Internet banking and depository. The Corporate/Wholesale Banking includes corporate relationships not included under Retail Banking, corporate advisory services, placements and syndication, management of public issue, project appraisals, capital market related services and cash management services.

Angel says that the other key positive from the result was a sequential CASA improvement, reasonable non-interest income growth and continued retail network expansion. With the recommended target price of

1459, if the stock is bought at Thursday's closing price of

1225.70, the percentage of gain would be 15.99 percent.

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