The Indian Equity market made a strong move with market opening on Monday along with this, week marks the commencement of festive week and Christmas holiday. As the markets rally all the indices makes positive move with Nifty 50 and BSE Sensex. While Nifty 50 made a mark of 26100 and above with BSE Sensex ticking the levels of 450 points and above.
Coming to research report by ICICI Securities on Axis Bank it states, We sense a strategic shift in Axis Bank (Axis)’s playbook, basis our meeting with Mr Amitabh Chaudhry (MD&CEO), Mr Subrat Mohanty (ED), Mr Puneet Sharma (CFO) and Mr Rahul Jain (Head-IR). Axis is seemingly leaning towards prioritising loan growth (possibly over NIM vs earlier stance of NIM over growth). Beyond the recent 25bps repo rate cut, its rising focus on loan growth – starting with wholesale – is likely to delay NIM recovery, without materially altering NII growth (we trim FY26E NII by ~1%). We raise FY26E gross slippages, factoring in likely higher technical slippages (a bit disappointing), though hope that the impact on credit cost is lesser.
On the outlook side it maintains a BUY call with keeping various points in mind, Valuations at ~1.5x FY27E ABV (vs. possible RoA of ~1.6% and above systemic growth) should cushion the downside. That said, an upswing could be swift, if there is reasonable improvement in core slippages, cushioned NIM outcomes and broad-based loan growth. Maintain BUY with the TP trimmed to 1,435.
Shriram Finance to move ahead with the market rally, MUFG Bank to acquire 20% stake in SFL; profitability to improve structurally. Shriram Finance (SFL) has entered into a strategic partnership with MUFG Bank (Japan-based), wherein the partner has agreed to invest ~USD 4.4bn for 20% stake in SFL via preferential issue. On a fully diluted basis, MUFG Bank and the existing promoter group led by Shriram Capital Private would own ~20% each. Further, MUFG Bank will have the right to appoint two nominee directors on SFL’s Board, which will further strengthen its governance. Post its merger with SCUF in CY22, this is the second major corporate event in SFL’s journey; the merger brought with it the second wind for growth, as reflected in SFL’s AUM growth accelerating to >15% YoY by Sep’25 vs. STFC’s timid FY19–23 spell of 9%/5%/7%/8%/14% (standalone basis). Similarly, the enhanced capital base may accelerate its growth journey going ahead.
