For Q3FY2019, Axis Bank reported PAT of 1,681 Cr, which is the highest in past 11 quarters. This was supported by steady NII growth (18.4% yoy), and recovery of `998cr from written off accounts.
Outlook & Valuation: Axis Bank currently trades at 2.1x its FY2021E price to book
value (after adjusting value of subsidiaries). We expect the stock to get re-rated owing to (1) new leadership; (2) limited stressed loan pool; (3) improvement in return ratios (ROA/ROE – 1.1%/12.2% by FY2020E). We recommend Buy on the
stock with a Target Price of `860.

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