The earnings this time was good. Asset quality good, no exposure to the future group, margins were a little disappointing and i think the thing most people were upset about was the opex that likely to remain high for some time
Citi deal was an ok deal, it doesn’t move the needle and i think they paid a little too much for it. Especially if they have to raise capital at these share prices. The really kicker would be if the citi employees integrate into axis and make it a more predictable safe bank with deep leadership talent
Big risk is that everyone knows that fund raising has to happen in 18-24 months, after the citi deal the tier comes down to 13% which very comfortable, especially since they have the unused covid provisions, but this leaves them less capital incase there is strong growth.
And the axis amc front running will dent the valuation and credibility of the entire group
But next years earnings should be 16-18k cr, implying a valuation of 11-13 PE, 1.7 PB for a such a quality bank
Disc: Still very positive and adding at these prices