Our 14th company in the Series of Best Stocks to Buy in India for Long term 2022 is Axis Bank Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Axis Bank Limited (the Bank) provides a suite of corporate and retail banking products. The Bank’s segments include Treasury, Retail Banking, Corporate/Wholesale Banking and Other Banking Business.
Now Let’s check the important fundamental figures of this company. This is a large cap company with Market Cap ₹2,17,543cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 30.23
Sector PE Ratio: 27.60
PE Ratio of this company is high than Sector’s PE. So it’s a Average PE than the peers of this company.
PB Ratio : 2.10
Sector PB Ratio : 2.33
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 1%
Sector Dividend Yield : 0.55%
Dividend of this company is high than Sector’s dividend. So it’s Below Average PB than the peers of this company.
ROE: 6.48%
ROCE: 6.32%
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 80,847.94 | 7,195.51 |
| 2020 | 80,057.67 | 1,853.12 |
| 2019 | 70,232.40 | 5,038.60 |
| 2018 | 58,476.68 | 455.82 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 9,06,600.83 | 8,41,477.76 | 7,46,248.68 | 6,39,565.72 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 , Company have 9,06,600.83 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 11,694.44 | 29,311.37 | 36,244.88 | -39,245.28 |
Asset Level: Axis Bank’s Assets to Equity ratio (9.7x) is low.
Allowance for Bad Loans: Axis Bank has a low allowance for bad loans (21%).
Low Risk Liabilities: 77% of Axis Bank ‘s liabilities are made up of primarily low risk sources of funding.
Loan Level: Axis Bank has an appropriate level of Loans to Assets ratio (60%).
Low Risk Deposits: Axis Bank ‘s Loans to Deposits ratio (86%) is appropriate.
Level of Bad Loans: Axis Bank has a high level of bad loans (3.8%).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 11.64% | 51.38% | 19.61% | 5.71% | 11.66% |
| Mar 2021 | 11.69% | 52.49% | 18.67% | 4.91% | 12.24% |
| Dec 2020 | 13.93% | 51.43% | 17.73% | 4.94% | 12.31% |
| Sep 2020 | 13.93% | 51.02% | 17.95% | 5.19% | 11.91% |
Above table showing there is no big change in Promotors holding which is 11.64% in June 2021. FIIs invested in June 2021 with 51.38% and retail investor is 11.66%.
Now We’ll check the return of the company, This company given 9.40% returns in last 1 year from 2021 to 05 Jan 2022.
Investment Checklist for Axis Bank Ltd.
- The company is currently profitable
- High level of non-cash earnings
- Significant insider selling over the past 3 months
- Earnings have grown by 23.6% per year over past 5 years
- They do not pay a dividend
- Share price has been stable over the past 3 months
- Profit margins improved or Axis Bank became profitable
- At least 3 years of financial data is available
- No concerning events detected
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹331B)
- Axis Bank does not have negative shareholders equity.
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 650 to 700
Target: 900 (25% Upside)
Time Horizon: 1 Year
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 14th company in the Series of Best stocks to buy in India for Long term 2022. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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