Axis Bank reports 88.5% Net Income decline in 2018 while 1.5% Revenue growth
26 Apr 2018 • About Axis Bank (
$AXB) • By InTwits
Axis Bank reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Axis Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 8.8%.
- CAPEX is quite volatile: ₹8,550m in FY2018, ₹7,737m in FY2017, ₹14,944m in FY2016, ₹5,386m in FY2015, ₹6,078m in FY2014
- The company has potentially unprofitable business model: ROIC is 0.2%
- It operates with high leverage: Net Debt/EBITDA is 9.0x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 1.5%. During FY2014-FY2018 Revenue growth topped in FY2015 at 15.6% and was decelerating since that time.
Net Income margin decreased on 6.1 pp from 6.9% to 0.78% in FY2018. Net Income margin followed a declining trend at -4.1 pp per annum in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.5%. The company's CAPEX/Revenue showed almost no change from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at low ROIC (0.2%) and ROE (0.8%). ROIC decreased on 2.8 pp from 3.1% to 0.25% in FY2018. ROE decreased on 6.4 pp from 7.2% to 0.76% in FY2018. ROIC declined at -2.3 pp per annum in FY2014-FY2018. ROE followed a declining trend at -4.4 pp per annum in FY2014-FY2018.
Leverage (Debt)
Debt jumped on 35.3% while cash surged on 15.0%.
Axis Bank has no short term refinancing risk: cash is higher than short term debt (151.9%).
Financial and operational results
FY ended 31 Mar 2018
Axis Bank ($AXB) key annual financial indicators| mln. INR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 386,025 | 446,166 | 512,801 | 575,967 | 584,767 | 1.5% |
| Net Income | 63,101 | 74,479 | 83,497 | 39,530 | 4,558 | -88.5% |
Balance Sheet
|
|---|
| Cash | 170,414 | 198,188 | 223,612 | 308,579 | 354,811 | 15.0% |
| Short Term Debt | 187,333 | 162,944 | 157,172 | 199,690 | 233,588 | 17.0% |
| Long Term Debt | 527,392 | 843,935 | 1,138,477 | 1,124,548 | 1,557,671 | 38.5% |
Cash flow
|
|---|
| Capex | 6,078 | 5,386 | 14,944 | 7,737 | 8,550 | 10.5% |
Ratios
|
|---|
| Revenue growth | 13.1% | 15.6% | 14.9% | 12.3% | 1.5% | |
|
|---|
| Net Income Margin | 16.3% | 16.7% | 16.3% | 6.9% | 0.8% | -6.1% |
| CAPEX, % of revenue | 1.6% | 1.2% | 2.9% | 1.3% | 1.5% | 0.1% |
|
|---|
| ROIC | 9.1% | 8.8% | 7.6% | 3.1% | 0.2% | -2.8% |
| ROE | 17.6% | 17.9% | 17.0% | 7.2% | 0.8% | -6.4% |
Peers in Banks
Below you can find Axis Bank benchmarking vs. other companies in Banks industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Halyk Savings Bank Of Kazakhstn JSC ($HSBK) | 16.3% | 19.5% | 16.4% | 59.5% | |
| Zenith Bank ($ZENB) | | 6.8% | 17.9% | 46.7% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 18.9% | 26.8% | 27.0% | 46.4% | |
| TCS Group Holding ($TCS) | 11.5% | 10.6% | 34.0% | 33.7% | |
| Kazkommertsbank JSC ($KKB) | 16.3% | 41.4% | -1.4% | 31.8% | |
| |
|---|
| Median (42 companies) | 11.5% | 3.5% | 3.4% | 4.2% | |
|---|
| Axis Bank ($AXB) | | 15.6% | 14.9% | 12.3% | 1.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lloyds Banking Group ($LLPC) | 13.1% | 13.6% | 14.5% | 14.5% | |
| Banco Santander Sa ($BNC) | 8.9% | 10.2% | 9.1% | 10.0% | |
| Bcb Hldgs Ltd ($BCBW) | 5.4% | 2.5% | 3.0% | 7.3% | |
| Royal Bank Of Scotland Group ($RBS) | 4.1% | 4.6% | 5.6% | 7.1% | |
| Diamond Bank ($DBPA) | 6.0% | 6.7% | 6.2% | 7.0% | |
| |
|---|
| Median (38 companies) | 2.1% | 2.6% | 2.0% | 1.9% | |
|---|
| Axis Bank ($AXB) | 1.6% | 1.2% | 2.9% | 1.3% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TCS Group Holding ($TCS) | 6.7% | 3.4% | 22.5% | 31.8% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.1% | 30.3% | 28.0% | 25.3% | |
| Guaranty Trust Bank ($GRTB) | 17.8% | 16.0% | 17.4% | 18.3% | |
| Sberbank Of Russia ($SBER) | 4.8% | 4.0% | 9.4% | 13.0% | |
| Zenith Bank ($ZENB) | 15.0% | 11.2% | 11.1% | 11.4% | |
| |
|---|
| Median (42 companies) | 4.4% | 3.4% | 4.5% | 4.7% | |
|---|
| Axis Bank ($AXB) | 9.1% | 8.8% | 7.6% | 3.1% | 0.2% |
