Axis Bank One of The Good Banking Stock To Hold

Axis Bank has posted a good performance for the second quarter ended 30th September 2008. The net interest income for Q2 was Rs. 913.47 , a growth of 55% yoy. The Net Profit for the second quarter was Rs. 402.91 crore, up 76.85% yoy. Its Net NPA was at 0.43% of Net Customer Assets. In today’s time maintaining asset quality is very important and on this front, Axis scores high. Its capital adequacy ratio of 12.20% also indicates that its capital is leveraged adequately. The quarterly EPS (diluted) at Rs. 11.07 was 55.04% higher than the EPS of Rs. 7.14 in Q2 of the previous year.

The Bank has reported a Trading Income of Rs. 36.16 crore in Q2, a decline of 42%yoy. The share of Trading Income to Operating Revenue decreased to 2% in Q2 as compared to 6% in the Q2 of the preceding year. The profitability of the Bank is therefore strongly underpinned by sustained core earnings of Net Interest Income and Fees.

The Bank has a wide presence through its 729 Branches & Extension Counters across 442 cities and towns across India. It has an ATM network of 3,082 ATMs, making it the third largest in the country.

Axis Bank has probably reported one of the highest growth rates in the sector, and it is yet to catch enough investor fancy enjoyed by its peers – HDFC Bank and ICICI Bank. The stock was up yesterday over 3% at Rs.559. Banking stocks are expected to do well in the next fiscal and best to accumulate as every dip.
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