Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
HDFC Bank
Another stable and sound quarter
„ Lower NPL accretion boosted core profits: 1:5 stock split announced
HDFC Bank (HDFCB) reported Q4FY11 profit of Rs11.1bn (+33% y/y) slightly
ahead of UBS-e of Rs10.7bn and in line with consensus. NII at Rs28.4bn
(+21%y/y, +2%q/q) was supported by stable NIM at 4.2% sequentially. Key
highlights: 1) stable CASA at 50.5%, 2) decline in credit costs to 0.8% (% of
opening loan), 3) sequential decline in gross/ net NPA, 4) growth of 23% in core
fee income, 5) the bank has announced 1:5 stock spilt.
„ Loans grew 27% y/y while LD ratio declined sequentially to 77%
Credit grew 27%y/y while remained flat q/q due to run off in short term loan and
sell down of Rs15bn in Q4. Resultantly, loans to deposit ratio declined to 77% in
March 2011 from 83% in Dec 2010. We expect loans to grow at 24% CAGR in
FY11-13E and building in 10bps y/y lower margins in FY12.
„ Strong asset quality with bank making excess provision of Rs3.3bn in Q4
Bank reported exceptionally strong asset quality with gross NPL additions down to
1.1% in FY11 from 2.6% in FY10. It used its excess standard assets provisioning
to create counter cycle provisions of Rs3.3bn and to that extent reported profit
could have been higher. We expect LLP to go up by 20 bps y/y in FY12 as bank
exhaust its excess standard asset provisions by Q2FY12.
„ Valuation: Raise price target to Rs2500, Maintain Neutral
We raise our FY12/13 earnings estimate by 3.6% and 6.7% respectively. We raise
our PT to Rs2500 from 2400 and Maintain Neutral. We base our price target on
residual income method with cost of equity and terminal RoE of 12.75%
Q HDFC Bank
HDFC Bank was established by HDFC, a housing finance company,
in 1995. The bank has established a network of 1,506 branches and
2,890 ATMs, both through organic and inorganic routes. Most of its
new branches are in non-metro/under-banked regions, a regulatory
requirement and strategy to attract more current and savings accounts
from smaller towns. About 62% of HDFC Bank's branches are outside
the nine biggest cities.
Q Statement of Risk
We believe a sustained economic slowdown could impact the banking
and finance sector on several fronts: lead to a slowdown in credit,
increase NPL risk, impact fee income, and exert pressure on NIM.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
HDFC Bank
Another stable and sound quarter
„ Lower NPL accretion boosted core profits: 1:5 stock split announced
HDFC Bank (HDFCB) reported Q4FY11 profit of Rs11.1bn (+33% y/y) slightly
ahead of UBS-e of Rs10.7bn and in line with consensus. NII at Rs28.4bn
(+21%y/y, +2%q/q) was supported by stable NIM at 4.2% sequentially. Key
highlights: 1) stable CASA at 50.5%, 2) decline in credit costs to 0.8% (% of
opening loan), 3) sequential decline in gross/ net NPA, 4) growth of 23% in core
fee income, 5) the bank has announced 1:5 stock spilt.
„ Loans grew 27% y/y while LD ratio declined sequentially to 77%
Credit grew 27%y/y while remained flat q/q due to run off in short term loan and
sell down of Rs15bn in Q4. Resultantly, loans to deposit ratio declined to 77% in
March 2011 from 83% in Dec 2010. We expect loans to grow at 24% CAGR in
FY11-13E and building in 10bps y/y lower margins in FY12.
„ Strong asset quality with bank making excess provision of Rs3.3bn in Q4
Bank reported exceptionally strong asset quality with gross NPL additions down to
1.1% in FY11 from 2.6% in FY10. It used its excess standard assets provisioning
to create counter cycle provisions of Rs3.3bn and to that extent reported profit
could have been higher. We expect LLP to go up by 20 bps y/y in FY12 as bank
exhaust its excess standard asset provisions by Q2FY12.
„ Valuation: Raise price target to Rs2500, Maintain Neutral
We raise our FY12/13 earnings estimate by 3.6% and 6.7% respectively. We raise
our PT to Rs2500 from 2400 and Maintain Neutral. We base our price target on
residual income method with cost of equity and terminal RoE of 12.75%
Q HDFC Bank
HDFC Bank was established by HDFC, a housing finance company,
in 1995. The bank has established a network of 1,506 branches and
2,890 ATMs, both through organic and inorganic routes. Most of its
new branches are in non-metro/under-banked regions, a regulatory
requirement and strategy to attract more current and savings accounts
from smaller towns. About 62% of HDFC Bank's branches are outside
the nine biggest cities.
Q Statement of Risk
We believe a sustained economic slowdown could impact the banking
and finance sector on several fronts: lead to a slowdown in credit,
increase NPL risk, impact fee income, and exert pressure on NIM.
No comments:
Post a Comment