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Indian Bank
For 4QFY2011, Indian Bank registered net profit growth of 7.0% yoy to `439cr; however,
on a sequential basis, net profit declined by 10.7%. The result was below our estimate of
`486cr mainly on account of higher tax provisioning (43.5% effective tax rate for
4QFY2011) than factored in by us. Net interest income (NII) grew by 18.9% yoy, slightly
above our estimates. Net advances for the bank grew marginally by 1.8% qoq and 20.1%
yoy to `75,250cr, while deposits grew by 4.7% qoq and strong 24.0% yoy to `1,05,804cr.
Non-interest income grew by 9.2% qoq, but came in lower by 7.3% on a yoy basis, to
`272cr. Operating expenses remained muted sequentially, but increased by 35.2% on a
yoy basis, to `480cr. Cost-to-income ratio improved to 34.7% in 4QFY2011 from 36.9%
in 3QFY2011.
The bank’s asset quality also showed improvement with gross and net NPAs in absolute
terms declining by 1.6% qoq and 4.8% qoq, respectively. Gross and net NPA ratios of the
bank improved marginally by 4bp each to 0.98% and 0.53%, respectively, with a provision
coverage ratio of 84.3% including write-offs (83.0% in 3QFY2011).
At the CMP, the stock is trading at 0.9x FY2012E ABV. We maintain our Buy
recommendation on the stock with a target price of `269. We may revise our estimates
post interaction with the management.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indian Bank
For 4QFY2011, Indian Bank registered net profit growth of 7.0% yoy to `439cr; however,
on a sequential basis, net profit declined by 10.7%. The result was below our estimate of
`486cr mainly on account of higher tax provisioning (43.5% effective tax rate for
4QFY2011) than factored in by us. Net interest income (NII) grew by 18.9% yoy, slightly
above our estimates. Net advances for the bank grew marginally by 1.8% qoq and 20.1%
yoy to `75,250cr, while deposits grew by 4.7% qoq and strong 24.0% yoy to `1,05,804cr.
Non-interest income grew by 9.2% qoq, but came in lower by 7.3% on a yoy basis, to
`272cr. Operating expenses remained muted sequentially, but increased by 35.2% on a
yoy basis, to `480cr. Cost-to-income ratio improved to 34.7% in 4QFY2011 from 36.9%
in 3QFY2011.
The bank’s asset quality also showed improvement with gross and net NPAs in absolute
terms declining by 1.6% qoq and 4.8% qoq, respectively. Gross and net NPA ratios of the
bank improved marginally by 4bp each to 0.98% and 0.53%, respectively, with a provision
coverage ratio of 84.3% including write-offs (83.0% in 3QFY2011).
At the CMP, the stock is trading at 0.9x FY2012E ABV. We maintain our Buy
recommendation on the stock with a target price of `269. We may revise our estimates
post interaction with the management.
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