Sector - Banking/Finance Bank - Axis Bank

Sector – Banking/Finance
Bank - Axis Bank

Introduction: The 3rd largest private sector Bank of India is Axis Bank which was previously
known as UTI bank. UTI bank changed its name to Axis in 2007 and it offers the entire
spectrum of financial services to customer segments covering Large & Mid-Corporates,
MSME, Agriculture and business retail. With a Balance sheet size of Rs.383245 Crores as on
31st March 2014, Axis bank has achieved consistent growth and stable asset quality with a 5
year CAGR (2010-2014) of 21% in total assets, 19% in total deposits, 23% in total advances
and 28% in net profit. The customers of Axis bank are generally high income group mainly
working professionals who looks for best banking services. The customers are middle or
upper class people.
Company Vision: “To be the preferred financial solutions provider excelling in customer
delivery through insight, empowered employees and smart use of technology”
SWOT Analysis of Axis Bank
STRENGTHS
➢ Effectively using its capital to generate profit - RoCE improving in last 2 years
➢ Increasing profits every quarter for the past 2 quarters
➢ Book Value per share improving for last two years
➢ FII/FPI or Institutions increasing their shareholding
➢ Strong Momentum: Price above short, medium and long term moving averages
➢ Growth in Net Profit with increasing Profit Margin (QoQ)
➢ Company able to generate Net Cash- Improving Net Casdh flow for last 2 years
➢ Company with Zero Promoter Pledge
➢ Companies with rising net profit margins- quarterly as well as TTM basis
WEAKNESSES
➢ MFs decreased their shareholding last quarter
➢ Companies with High Debt
➢ Promoter decreasing their shareholding
OPPORTUNITIES
➢ Rising Delivery Percentage Compared to Previous Day and Month, Strong Volumes
➢ Brokers upgraded recommendation or target price in the past three months
➢ Positive Breakout First Resistance ( LTP > R1)
➢ Highest Recovery from 52 Week Low
➢ Decrease in Provision in recent results
➢ RSI indicating price strength
THREATS
➢ Company with negative growth and promoters decreasing shareholding QoQ
➢ Increasing Trend in Non-Core Income
➢ Stocks with high PE (PE > 40)
➢ Increase in NPA in Recent Results
➢ Insiders sold stocks
STP Analysis of Axis Bank

Axis bank segments the market based on Psychographics & demographics variables like
income & occupation, age, social class etc. It targets the business class & tech savvy
customers for whom time is more important and who would prefer convenience
in banking with bank.
Competitive Analysis
In the stagnant banking industry where Public and Private Players are trying hard to make
their balance sheet profitable the advent of innovation in serviceability will be the major
source of income for the private players. Players like AXIS, ICICI, HDFC,
KOTAK Mahindra etc. are providing unique services like balance through twitter tweet,
Choose your a/c No, Video banking which is making them front runner in driving their
revenue in increase customer base as well as profitability. Market in the Marketing strategy
of Axis bank – Banking industry is going through a turnaround phase where PSU’s, Private
Banks are fighting neck to neck in order to re-establish itself in the competitive market.
Private Banks like AXIS HDFC, ICICI Bank revenue and profitability is riven by
3rd party products whereas PSUs revenue and profitability is driven by retail lending, CASA
share. The close competitors are HDFC Bank, ICICI Bank.
HDFC Bank: HDFC Bank is a provider of financial products and services which operates in
Treasury, Retail Banking, Wholesale Banking, and other banking business segments. It was
founded in 1994. A subsidiary of the Housing Development Finance Corporation, HDFC
Bank was incorporated in 1994, with its registered office in Mumbai, Maharashtra, India. Its
first corporate office and a full-service branch at Sandoz House, Worli were inaugurated by
the then Union Finance Minister, Manmohan Singh. As of 30 June 2019, the Bank's
distribution network was at 5500 branches across 2,764 cities. The bank also installed
430,000 POS terminals and issued 23570,000 debit cards and 12 million credit cards in FY
2017
ICICI Bank: ICICI Bank Limited is an Indian multinational banking and financial
service company with its registered office in Vadodara, Gujrat and corporate office
in Mumbai, Maharashtra. It offers a wide range of banking products and financial services for
corporate and retail customers through a variety of delivery channels and specialised
subsidiaries in the areas of investment banking, life, non-life insurance, venture
capital and asset management. The bank has a network of 5,275 branches and 15,589 ATMs
across India and has a presence in 17 countries. ICICI Bank is one of the big four banks of
India. The bank has subsidiaries in the United Kingdom and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai International Finance Centre,
China and South Africa; as well as representative offices in United Arab Emirates,
Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also established
branches in Belgium and Germany.
Competitive Advantage: Competitive advantage in the Marketing strategy of Axis bank
– According to the Global Banking 500 rankings, a valuation of global bank brands done
by Brand Finance, Axis Bank is the bank to watch out for and could emerge as India’s next
generation bank giving tough competition to established names like ICICI and HDFC in the
near future. Axis Bank seems to be moving fast on its digital strategy with a multi-fold
increase in the use of electronic banking channels. Also their innovative strategies like choose
your account number, Real time video banking, the first multi-social payment app in
PingPay and the first integrated mobile money platform through LIME, which is the
country’s first mobile app that offers wallet, shopping, payments and banking are unique and
innovative marketing strategies, giving the bank an advantage over others.
Future Growth Aspects: As the MSME sector is growing up rapidly in India so there is a
great opportunity to acquire the customer base by providing the best services in comparison
to its competitors. And the growth can be maximized by eliminating or minimizing the
weaknesses. So Axis Bank should clearly lookup on Asset quality which deteriorated
significantly, driven by corporate slippages, Operational risk was elevated, CASA growth
trended lower than the Bank’s historical growth rates, Corporate loan growth trailed the
Bank’s long term average growth rates, Fee income growth moderated to low teens, Cost to
Assets remained sticky even as the Bank gained scale.
Conclusion: As the bank is growing at a good pace and the ROE goal for the next year is
18% and this would be achieved by three elements namely Growth Profitability and
Sustainability. And as the MSME sector will grow there is ample opportunities for the bank
grow, because India also focusing on start-ups so they might need funds and by safe and
secure lending Axis bank will do better in future.

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Sector – Banking/Finance

Bank - Axis Bank

STP Analysis of Axis Bank

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