Axis Bank - Growth Outlook Gaining Traction: Motilal Oswal

Motilal Oswal Report

Axis Bank Ltd. has progressed well over past few years and has strengthened its balance sheet by making it granular, increasing the mix of retail loans and improving its provision coverage ratio.

As a result, its key metrics such as loan growth, margins and profitability have improved.

Loan growth is witnessing a healthy recovery with 14-18% growth over the past four quarters (versus 13% compound annual growth rate over FY19-22), driven by retail loans (18% CAGR).

Small business banking/rural loans posted a robust CAGR of 49%/23%. The rural and semi-urban market remains a key focus area, which should enable sustainable loan growth over the medium term. We, thus, expect a 17% CAGR in loans over FY22-25.

Axis Bank has multiple levers in place to offset the rise in the funding cost as 68% of loans are floating, which, coupled with the rising mix of high-yielding loans and a gradual reduction in low-yielding rural infrastructure development fund bonds (3% of assets), should help margins.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.