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Axis Bank gains 5% on appointment of Amitabh Chaudhry as the MD & CEO

The stock rallied 5% to Rs 676 on the BSE in early morning deal after the private sector lender on Saturday appointed Amitabh Chaudhry as Managing Director & CEO from January 1, 2019.

Deepak Korgaonkar  |  Mumbai 

Axis Bank
Axis Bank | Photo: Shutterstock

gained 5% to Rs 672 on the BSE early morning deals after the private sector lender on Saturday appointed as (MD& CEO) effective January 1, 2019.

“The board of directors of the Bank at its meeting held today has taken on record the approval granted by the Reserve Bank of India (RBI) to the appointment of Shri as the of the Bank, for a period of 3 years, with effect from 1st January 2019 up to 31st December 2021 (both days inclusive) and the terms and conditions relating to the said appointment, including remuneration,” said in a regulatory filing.

is currently the MD & CEO of He will take over from after she demits office on December 31, 2018.

Analysts see this as a positive for Axis Bank, as Mr. Chaudhry has a proven track record of successful leadership all through his career and will bring more emphasis on risk/compliance management and corporate governance.

"The development is positive for and we revise our target multiple to 2.4x (from 2.0x earlier). However, further, re-rating will be driven by further visibility on execution, strategic changes, and improved earnings profile. Maintain ‘HOLD’ rating," write Kunal Shah and Prakhar Agarwal of Edelweiss Securities in a note.

Axis Bank has outperformed the market by surging 34% from its recent low of Rs 505 on June 28, 2018. In comparison, the S&P BSE Sensex has gained 10% during the same period.

On Monday, the stock moved up 4% at Rs 673 in intra-day trade, as compared to 0.48% decline in the benchmark index. A combined 9.08 million equity shares have changed hands on the NSE and BSE so far.

On the flip side, they believe the development to be a near-term overhang on HDFC Standard Life Insurance's stock given the leadership change, uncertainty around replacement and higher valuations.

"HDFC Life is an institution in itself with best-in-class metrics and should be able to attract the best talent. Similarly, how the partnership of Axis Bank evolves with Max Life will be interesting to watch," they add.

First Published: Mon, September 10 2018. 09:37 IST