Axis Bank: Q1 Result In Line With Estimates Except NPA--Next Upside Only Abv 590 For 615-655, Otherwise 550-505 Again

Technical Charts:

Technical Analysis (Time & Price Action):

Axis Bank (CMP:580) has to sustain at least over 585-590 for an immediate to short term target of 600-605 & 615-625*. Sustaining above 625, it may target 635-645-655 in the medium term and only consecutive closing above 655*, Axis Bank might scale 700-750 &785-800 zone (FY:16-18 under bullish case scenario).

On the flip side, failure to sustain above 590, Axis Bank may face some selling pressure and might fall towards 571-567 & 561-550. Sustaining below 550, it may further fall to 537-526-513-505 & 488-480 territory in the near term (bear case scenario).

Technical Trading Levels (Positional):

	SL</>5	FROM SLR
		AXIS BK	CMP	580
			T1	T2	T3	T4	T5	T6	T7	SLR
Strong >	590		605	615	625*	635	645	655*	685-700	<585
Weak <	585		567	561	550*	537	526	513	505-480	>590

Some News Inputs:

Q1FY16 result of Axis Bank was in line with street estimates as far as top & bottom lines are concerned. But bad loans (stressed assets/NPA) surged unexpectedly by nearly three times (YOY) & two times from last QTR (Q4FY15). This shows bad loans can continue to hunt Indian Banking system for some more time to come considering an efficient bank like Axis's growing NPA woes.

Looking ahead, widespread economic recovery is being expected by many analysts in H2FY16 and if that happens in reality, stressed assets of Indian Banking system should decline sequentially and Axis Bank might be also one of the beneficiary of the same.

Also, yesterday's concall with RBI Gov is some what in dovish line & a rate cut in Sep'15 (out of policy meet) can't be ruled out. Although there are many caveats and RBI may act in Sep, only if Fed began hiking. Otherwise, Fed will wait for Dec and RBI may cut only in Oct by 0.25% to wait for Fed action in Dec.

Techno Funda Valuation As Par BG Metrics (Modified):

Current median valuation: 615

Projected fair valuation: 660-730-800 (FY:16-18)

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	LONG TERM	SHORT TERM	MEDIAN VALUE	200-DEMA	10-DEMA
AXISBANK	32.28	188.07	21.19	600.13	627.57	613.85	526.53	575.79

AXISBANK

37.05

218.25

21.19

642.94

672.34

657.64

526.53

575.79

AXISBANK

45.21

253.25

21.19

710.22

742.70

726.46

526.53

575.79

AXISBANK

54.15

293.95

21.19

777.28

812.82

795.05

526.53

575.79