Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Investment Rationale
§ Healthy CASA keeps margin higher: The bank’s CASA mix which is among the highest in the industry at 45%,
has helped the bank to maintain higher margins in the current rising rate scenario. The NIM’s for the Q3FY11
stood higher at 3.6%.
§ Slippages likely to come down in H1CY11: Though the slippages during M9FY11 was higher at 2.3%
(annualised) as compare to 1.9% in FY10, we believe that from H1CY11 onwards the slippage number is likely to
come down with NPAs in agriculture and restructured asset portfolio likely to taper off.
§ Return ratios to show improvement over FY11-12: Earnings likely to grow by a healthy 30% over FY11-12
driven by higher margins and healthy asset growth. Consequently, the RoA and RoE of the bank likely to
improve to 1.15% and 18.73% in FY12 from 0.91% and 14.8% respectively in FY10.
Valuations
§ At the CMP, the stock is quoting at 2.6x FY11E ABV and 2.1x FY12E ABV with a likely average RoE of 18% over
FY11-12E
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Investment Rationale
§ Healthy CASA keeps margin higher: The bank’s CASA mix which is among the highest in the industry at 45%,
has helped the bank to maintain higher margins in the current rising rate scenario. The NIM’s for the Q3FY11
stood higher at 3.6%.
§ Slippages likely to come down in H1CY11: Though the slippages during M9FY11 was higher at 2.3%
(annualised) as compare to 1.9% in FY10, we believe that from H1CY11 onwards the slippage number is likely to
come down with NPAs in agriculture and restructured asset portfolio likely to taper off.
§ Return ratios to show improvement over FY11-12: Earnings likely to grow by a healthy 30% over FY11-12
driven by higher margins and healthy asset growth. Consequently, the RoA and RoE of the bank likely to
improve to 1.15% and 18.73% in FY12 from 0.91% and 14.8% respectively in FY10.
Valuations
§ At the CMP, the stock is quoting at 2.6x FY11E ABV and 2.1x FY12E ABV with a likely average RoE of 18% over
FY11-12E
No comments:
Post a Comment