May consider cement pack after a few months; Axis Bank a candidate for rerating: Sandip Sabharwal
Sandip Sabharwal, asksandipsabharwal.com, says the Axis Bank stock needs to get re-rated higher. It trades at 1.8 times book while most of the other large private sector banks are more near 2.7 to 3 times. It trades at valuations which are 35% cheaper than HDFC Bank while on most parameters it is doing maybe as well or better in terms of gross NPAs, net NPAs, provision coverage, return on equity across the board.
Disadvantage Kotak is turning out to be advantage with good numbers from Axis and the entire PSB bank pack is also holding out very smartly. SBI had a solid 4.25% move, the smaller ones are holding out well. What is it that you have made of the RBI move on Kotak banning addition of credit cards as well as online accounts and Axis numbers as well?
Sandip Sabharwal: Axis numbers were very strong and Axis continues to be one bank which is unfairly cheap relative to many of the other large private sector banks. It trades at valuations which are 35% cheaper than HDFC Bank while on most parameters it is doing maybe as well or better in terms of gross NPAs, net NPAs, provision coverage, return on equity across the board.
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I believe Axis Bank results actually stood out and this should be one stock which needs to get re-rated higher. It trades at 1.8 times book
