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Stock Watch - Axis Bank


Axis Bank, previously UTI Bank, was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established.
Axis Bank stands apart from its private sector competitors HDFC Bank and ICICI Bank — in one crucial respect. While the other two banks have envisaged retail banking as a key area of strategic emphasis — with the share of the retail business growing strongly year after year— the share of retail business, particularly retail assets, has actually come down quite sharply in the case of Axis Bank.

Positives
..Consistency in its earning growth (grown over 30% YoYin 33 out of
the last 35 quarters)
..Robust asset quality despite strong growth in assets during last
couple of years
..One of the highest CASA (40%), next only to HDFC Bank & SBI.
..Diversified loan book –well spread across all segments.
..Has strong technology, expanding distribution franchise & large
array of products
Risks
..Ripple effect of financial crisis in US & Europe
..Downside risk arises from hard-landing of our economy
..Deterioration in the asset quality, if any, would require higher provisioning.
At current price of around 400 it trades around 11 times FY09 and 9 times FY10.Medium to Long term investors can accumulate this stock which can give very decent returns.

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