Analysts predict Axis bank's slippage ratio to dip in FY14

As it has highest exposure to SME sector.

Macquarie Research analysts said that cyclical NPLs (mainly SME and mid-corporate NPLs) could peak-out in the next couple of quarters given improvement in the economy, lower commodity prices and a benign interest rate environment. 

Axis bank has highest exposure to the SME sector among the private sector banks and accordingly analysts expect the slippage ratio to come down in FY14.

Here's more from Macquarie Research:

Loan growth is likely to remain above industry supported by strong retail loan growth. Axis has been adding branches rapidly and has managed to bring down its share of corporate (wholesale/bulk) deposits to 35% of overall deposits from 43% seen in Dec-2010.

CASA ratio is at the bottom and we expect this to improve going forward. NIM is likely to remain strong and stable at 3.5% in FY14E. The stock trades at 1.7xFY14E P/BV (post equity dilution) for its sustainable ROE around 18-19%.