Axis Bank Ltd. reported major increase in Q3FY18 net profit of 25% YoY. The net profit stood at Rs 726 cr for the quarter ended December, 2017 vs. Rs 580 cr for the same quarter in the previous year on account of lower provisioning for bad loans. However, Operating profit increased 4.3% to Rs 11,722 cr for quarter under review vs. Rs.11,235 cr for the quarter ended September, 2017.
Valuation: We have valued the stock at the P/ABV of 2.9x to its FY19E and arrived at a fair value of Rs 669 per share. At CMP of Rs 607 the stock is available at its FY 19E P/ABV of 2.7(x). We have ‘HOLD’ rating on the stock.
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