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Buy Axis Bank, fair value Rs 620: Kotak Institutional Equities

The brokerage has revised its fair value to Rs 620 from Rs 740, cutting estimates by around 20-25 per cent to address its concerns.

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Last Updated: Apr 03, 2020, 08.19 AM IST
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Kotak Institutional Equities has upgraded Axis Bank to buy from reduce. The stock ended down 5.5 per cent at Rs 358.45 on Wednesday while the BSE Sensex closed 1203.18 points down (-4.08 per cent) at 28,265.31.

Axis Bank, incorporated in 1993, has a market cap of Rs 101143.05 crore.

Investment Rationale

The brokerage said the upgrade reflects the correction in valuation multiples, strong liability franchise and a slightly different entry point into this slowdown for the bank which should result in faster recovery in business momentum as it moves into a more normalised environment. The brokerage has revised its fair value to Rs 620 from Rs 740, cutting estimates by around 20-25 per cent to address these concerns.

Financials


Axis Bank's key products/revenue segments include Interest & Discount on Advances & Bills which contributed Rs 41322.02 crore to sales value (75.15 per cent of total sales); Income From Investment which contributed Rs 11349.07 crore to sales value (20.64 per cent of total sales) and Interest which contributed Rs 1621.33 crore to sales value (2.94 per cent of total sales) for the year ending March 31, 2019.

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