Citigroup just a while ago in a research report revised the target price for UTI-Axis Bank to Rs 675 with Outperform rating.
UTI Bank has now formally changed its name to Axis Bank. Citi raised target price to Rs675 (Rs560), on the back of a] new capital and rolling forward valuation benchmark valuations to FY09 (FY08); b] revised earnings (up 5%-2% FY08E-FY09E); c] relatively higher loan and fee growth momentum. Bank is expected to have higher asset growth momentum and broader business mix, through new initiatives in credit cards, international, wealth, distribution businesses and forays in private equity and institutional broking.
On the flip side, AXBK is more than doubling its capital base; but will it add value? – Returns on shareholder equity – No. Axis Bank has pulled back after a sharp 44% move over the quarter and capital raising. Returns over the next 12 months is expected to be moderate with a price target of Rs 675.