In this article, we can analyze Axis Bank LTD as a Potential Multibagger Stock as on 2022 November.
Axis Bank Ltd
Axis Bank is the third largest private sector bank in India. It is the 4th largest issuer of credit cards and the 2nd largest merchant-acquiring bank in India with an installed capacity of 10 lakh+ terminals, acquiring an incremental market share of 30% in FY22. Mr.Rakesh Makhija is the current Chairman, Director & non-Executive (part-time). Mr. Amitabh Chaudhry is the Managing director & CEO.
The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.
Axis Asset Management Co. Ltd (75% shareholding)
It undertakes the activities of managing the mutual fund business. It had an average AUM of ~2,59,800 crores in FY22.
Treds Ltd (67% shareholding)
Treds Ltd (67% shareholding) is engaged in the business of facilitating the financing of trade receivables. It is one of the three entities allowed by RBI to set up the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating cash flows for MSMEs. Its digital invoice discounting platform ‘Invoicemart’ has set a new benchmark by facilitating the financing of MSME invoices of ₹ 27,000 crs+.
Website
Location
The Overseas operations of the Bank are spread over eight international offices with branches in Singapore, Dubai (at DIFC), and Gift City-IBU; representative offices in Dhaka, Dubai, Abu Dhabi, and Sharjah and an overseas subsidiary in London, UK.
Leaders
Mr.Rakesh Makhija is the current Chairman, Director & non-Executive (part-time). Rakesh is currently the Chairman of SKF India Ltd, Tata Technologies Ltd, TML Drivelines Ltd, Tata Marcopolo Motors Ltd, and A. Trends Ltd.
Mr. Amitabh Chaudhry is the Managing director & CEO. Amitabh is currently the Chair of the FICCI Committee on Banking. He has served as Director on the Board of several reputed organizations and has received numerous awards and recognitions.
Mr.Rajiv Anand is the Deputy managing director. He is a Member of the Corporate Social Responsibility Committee and the Committee of Whole Time Directors of the Bank. He is the Co-Chair of the Banking Taskforce at CII – Western region, a member of the National Committee on Banking at CII and holds several key positions in other committees and industry bodies. Rajiv Anand is a Commerce graduate and a Chartered Accountant by qualification.
Highlights
Axis Bank has a good image among the urban population, Axis Bank is registering good growth in the Indian banking sector, A huge portfolio of product and services offered by the Bank, Decent penetration in the rural areas have boosted the business, One of the largest private sector financer in India for Agriculture loans wiz Retail Agri & Corporate Agri, Excellent online services offered by Axis Bank like net banking, mobile apps, etc, Good advertising and brand exercise has helped the brand grow.
balance sheet size of Rs. 11,75,178 crores as on 31st March 2022, Axis Bank has achieved consistent growth and with a 5-year CAGR (2016-17 to 2021-22) of 14% each in Total Assets & Advances and 15% in Deposits.
Subsidiaries
- Axis Securities and Sales Ltd
- Axis Private Equity Ltd
- Axis Trustee Services Ltd
- Axis Asset Management Company Ltd
- Axis Mutual Fund Trustee Ltd
Awards
Axis Bank won the ‘Asian Bank of the Year and India Bond House (IFR Asia Award), Innovation in Data intelligence( IDC Industry Innovation Award), Silver Shield for Excellence in financial reporting for 2020-21(Institute of Chartered Accountants of India Award), Institute of Chartered Accountants of India Award(ESG India Leadership Awards), Financial Inclusion Initiative of the Year (India) (ABF Retail Banking Awards), Most Recommended Bank in India and 8th in Asia Pacific(Asian Banker Bank Quality Consumer Survey on Retail Banks), Best Digital Bank Award(Asiamoney Banking Awards for the 2nd consecutive year and 4th time in the last five years), Best Digital Lending – Private Sector Bank Award(ASSOCHAM National E-Summit & Awards).
Products & Services
- Accounts
- Deposits
- Cards
- Loans
- Forex Services
- Investments
- Insurance
- start a sip
- FAStag
- Rural banking
- Financial inclusion
Profit & Loss
Expansions
- Grabdeals Offering additional discounts to our consumers who like to shop online with our partners─ Amazon and Flipkart.
- Merchant Cash Advance Helping small merchants grow their businesses through timely cash infusion.
- Digital Forex Cards Reducing the hassle and time.
- Digital AutoLoans for consumers to get multi-currency forex cards for diverse needs.
- Buy Now Pay Later Providing digital loans to consumers right there, right now.
- Digital Credit Providing instant credit to consumers to manage their cash requirements.
- To increase its footprint in rural areas, Axis Bank launched a novel Rural Banking Initiative. Axis Bank has introduced the Rural Banking Services with branches in Punjab, Tamil Nadu, Rajasthan, and Gujarat as part of its ambition to be a comprehensive solutions bank. By the conclusion of this fiscal year, Axis Bank will launch 100 branches delivering rural banking services throughout India. This launch is a part of the company’s Rural Banking Initiative, which aims to increase its presence in Tier-III, Tier-IV, and Tier-V cities with a population between 10,000 and 50,000.
Positives
- Company has delivered good profit growth of 29.0% CAGR over last 5 years
- The company has been consistently maintaining a NIM of 3.11% since last 3 years.
- CASA stands at 45.00% of total deposits.
- Good Capital Adequacy Ratio of 18.54%.
- The company has delivered good Profit growth of 40.70% over the past 3 years.
- company Share Price Increased by 18.81% Over the Past Three Years
Negatives
- The bank has a very low ROA track record. Average ROA of 3 years is 0.70%
- Company has a low ROE of 7.08% over the last 3 years.
- High Cost to income ratio of 48.83%.
- Corporate Bannking segment have lot of complaints on infrastrcture
- The company has delivered a poor sales growth of 8.79% over past five years.
- Promoter holding is low: 9.69%
- Company has a low return on equity of 8.19% over last 3 years.
- Contingent liabilities of Rs.1,360,180 Cr.
- Company might be capitalizing the interest cost
- Earnings include an other income of Rs.17,199 Cr.
- Promoter holding has decreased over last 3 years: -6.91%
Warren Buffett Checklist
| Factor | |
| Economic moat | Moderate |
| Growth | Moderate |
| Valuation | Good |
| Debt | Moderate |
| Integrity | Good |
Summary
As per the Expansion & Value Investing grounds the company is having Multibagger Properties.
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