Axis Bank: Pain not fully priced in

Asset quality concerns might have peaked, but normalcy could take some more quarters

Around this time last year, Axis Bank started the trend of quantifying loans which could  turn bad in course of time. Terming this a ‘watch list’, it was estimated at Rs 22,628 crore at the end of the December quarter.
 
As it set a trend of sorts, the Street rewarded the bank for being forthright in estimating the pain ahead. However, confidence faded in the June 2016 quarter, after it declared slippage from outside the watch list. Since then, with each passing quarter, the pessimism has risen. And, in the recently concluded December quarter, with the non-watch list pain