Axis Bank’s top management provided deep insights into the bank’s strategy to achieve aspired RoE of 18% in the medium term (FY22E). New MD & CEO, Amitabh Chaudhary, showcased their Growth- Profitability- Sustainability (G-P-S) strategy. Drivers to lead to an uptick in RoE are; 1) Risk normalization (controlled asset quality and credit cost), 2) business mix optimization (RAROC based portfolio choice), 3) operating efficiency (cost to asset ratio to trim below 2%). Our RoE estimates, without factoring in capital infusion, are at ~15.4% in FY21E. Hence, RoE target of 18% by FY22E, along with capital infusion, seems a bit difficult

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