Axis Bank: Life After Result (478-507-655)

Technically, Axis Bank (CMP:552) has to sustain above 564 for an immediate target of 581-600 zone. Consecutive closing above 600, short term target may be around 625-655 area. Sustain above 655, Axis Bank could scale 700-800 territory in the mid to long term (FY:16-17, under bull market scenerio).

On the flip side, immediate support is around 540 & sustain below that it could fall to 534-524 area immediately & below that, it could fall 517-507 zone in the near term. Consecutive closing below 507, Axis Bank could crash to 485-478 zone & below that came 460-398 zone (under worst bear market scenerio, although very low probability).

Bottom line (Cyclical Trading Levels):

460-478-485-507-517-524-534-540-553-564-581-600-625-655

Axis Bank published its Q4 result yesterday at the fag end of the market, which is well above the street expectations backed by superior NII, retail loan growth & other fee based income and relatively stable NPA, despite NIM slipped a bit & higher provisions.

Going ahead, management is also confident of sequentially slower rise of NPA on the back of expected economic revival & corporate loan growth. For the banking industry, there is always a considerable lag period between RBI rate cuts & their own base rate cuts (3-4 months) and this factor might be helpful for healthy NIM in the coming quarters.

Axis Bank also approved FII limit from current 62% to 74% along with issue of DR(s) @ 5:1. There is no immediate plan of equity dilution in the near term.

As par BG metrics of quick TF model, median valuation of Axis Bank is around 625 as par the current TTM EPS. Projected median value may be around 655-700 (FY:16-17) under the current market conditions.

 

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	LONG TERM	SHORT TERM	MEDIAN VALUE	200-DEMA	10-DEMA
AXISBANK	31.56	151.42	23.88	604.64	637.24	620.94	485.09	538.81

 

AXISBANK

37.55

193.8

21.13

620.39

653.84

637.12

485.09

538.81

 

AXISBANK

44.3

248

21.13

673.85

710.18

692.02

485.09

538.81