{"id":82,"date":"2019-08-05T11:54:43","date_gmt":"2019-08-05T11:54:43","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=82"},"modified":"2019-10-03T11:57:55","modified_gmt":"2019-10-03T11:57:55","slug":"axis-bank-banks-arent-out-of-the-woods-yet-but-closer-to-the-tail","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2019\/08\/05\/axis-bank-banks-arent-out-of-the-woods-yet-but-closer-to-the-tail\/","title":{"rendered":"Axis Bank: Banks aren\u2019t out of the woods yet, but closer to the tail"},"content":{"rendered":"\n

Dated: 17th July 2019<\/em><\/p>\n\n\n\n

Interview with Mr Pralay Mondal (the head of retail banking at Axis Bank from ET NOW dated 17th July 2019)<\/p>\n\n\n\n

Interview highlights:
\uf076 The banking industry is in a perennial clean-up cycle and we are in the midst of an NBFC and real estate crisis. The NBFC model does not work; they cannot compete with banks on pricing. Banks are coming out of a very poor NPA cycle, but according to him, it is not out of the woods yet\u00a0
\uf076 The good news is that the clean-up is visible, we know what the issues are, it can get worse, but you have a fair understanding of the situation. The bad news is that globally, there are a lot of challenges \u2014 the US is not looking very well, we are caught amid trade wars and India is not immune to this.\u00a0
\uf076 The auto consumption is down, auto dealers are in shambles. There is clear demand destruction happening there. The consumption economy is not doing so well, there is a clear impact on mortgages.\u00a0
\uf076 The discretionary part, which is the personal loans, credit cards and unsecured loans where we don\u2019t have a full understanding of the end-use, which is growing at a very rapid pace.\u00a0
\uf076 One segment says that the credit-GDP penetration is very low, so we have big opportunities at the bottom of the pyramid segment. If you look at companies like Titan, HUL, ITC, Hero Honda, consumption is not taking off, so we need to understand that bank is a surrogate of all of this.\u00a0
\uf076 If the quality of NBFC portfolios being sold is good then the good portfolio is moving. Some of that will play out eventually, but it may not hit the banks hard.<\/p>\n\n\n\n

Consensus estimates: (source market screener website)
\uf076 The stock price is Rs 754\/- as of close price of 17th July 2019. It trades at 2.5x\/ 2.2x\/ 1.8x the consensus book value for FY20E\/ FY21E\/ FY22E of Rs 303\/ 346\/ 419 respectively.
\uf076 The consensus price target is Rs 851\/- valued at 2.5x FY21E book value of Rs 346\/-.<\/p>\n","protected":false},"excerpt":{"rendered":"

Dated: 17th July 2019 Interview with Mr Pralay Mondal (the head of retail banking at Axis Bank from ET NOW dated 17th July 2019) Interview highlights:\uf076 The banking industry is in a perennial clean-up cycle and we are in the midst of an NBFC and real estate crisis. The NBFC model does not work; they […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[104,4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/82"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=82"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/82\/revisions"}],"predecessor-version":[{"id":83,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/82\/revisions\/83"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=82"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=82"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=82"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}