Stock views on ICICI Bank, Pantaloon Retail, Axis Bank

Karvy Stock Broking on Axis Bank - Target of Rs 829

Karvy Stock Broking has maintained its buy rating on Axis Bank with a target price of Rs 829 in its research report.

"We have revised our Axis Bank earning estimates after a visit to the bank's senior management; we expect that the bank's credit growth would moderate to 31.5% (Y/Y) to Rs 1,146 billion from our earlier credit book estimate of Rs 1,226 billion in FY10. Net interest margin is estimated to shrink by 30 bps to 2.57% in FY10.The bank's core fee income growth momentum is expected to come down to 28% (Y/Y) in FY10 from 70% in FY08 and 50% in 9MFY09. The bank's management did not provide with any guidance or estimates on non-performing assets front; we expect 152% (Y/Y) rise in gross NPA in FY10 to Rs 21.5 billion and increased credit cost to 1.3% in FY10 from 0.71% in FY08 and 1.1% 9MFY09."

"We increase our earning estimates for FY09 by 5.0% to Rs 17.7 billion and reduce for FY10 by 9.6% to Rs 15.5 billion and reduce our target price by 29% to Rs 629 per share.We estimate the bank to record RoAE of 18.8% and 14.4% in FY09 and FY10 respectively. We re-iterate our BUY rating on the stock with a target price of Rs 629 at 2.2x adjusted book value FY10," says Karvy Stock Broking's research report.


Angel Broking on Pantaloon Retail - Target of Rs 439


Angel Broking has maintained its buy rating on Pantaloon Retail with a target price of Rs 439 in its research report.


"We are bullish on the long-term growth prospects of the Retail Sector despite the ongoing slowdown in the economy. Our Top Pick PRIL is the largest player in the Indian Retail Sector. We are positive on PRIL as it has been able to maintain its growth (YTD) at a healthy 31% on a Standalone basis and 34% on a consolidated basis despite the slowdown. We believe that PRIL Standalone would be able to meet our FY2009 and FY2010 Net Sales estimates of Rs 6,894 crore and Rs 8,492 crore, respectively. We estimate PRIL Standalone to clock Net Profit of Rs 154.6 crore and Rs 217.8 crore in FY2009 and FY2010, respectively.


On the bourses, the PRIL stock has witnessed significant correction in the past few months and is currently trading at attractive valuations and provides favourable risk-reward for the investors. We have valued PRIL's stake in FCH, HSRIL and Future Bazaar at Rs 33, Rs 13 and Rs 20, respectively. We maintain a Buy on the stock, with SOTP target price of Rs 439, translating into an upside of 73% from current levels," says Angel Broking's research report.


Sharekhan on ICICI Bank - Target of Rs 805

Sharekhan has maintained its buy rating on ICICI Bank with a price target of Rs 805 in its research report.

"As part of its strategy of focusing on capital preservation and improving asset quality, the bank does not intend to grow its balance sheet aggressively in the coming fiscal. It expects a balance sheet growth in mid single digits for FY2010, with the loan mix likely to shift further away from the retail segment."

"In view of the management, the pressure on the margins is likely to persist till H1FY2010 as the loan mix shifts away from the high yielding retail segment and a larger chunk of the wholesale deposits gets re-priced during the September-December 2009 period, paving the way for some margin expansion during H2FY2010."

"Despite the various concerns over the bank’s asset quality, its international business and the lack of triggers in the near term, we believe that the current valuations of the stock more than reflect the potential risks to the earnings. We maintain our Buy recommendation on the stock with a price target of Rs 805," says Sharekhan's research report.