Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HDFC Bank (HDBK.BO)
Sell Equity Research
Above expectations driven by lower provisions; valuations full
What surprised us
HDBK reported 2QFY12 PAT of Rs12bn (+31% yoy), 9% ahead of GSe and
in line with Bloomberg consensus on account of lower loan loss
provisioning at 0.8% of loans vs our estimate of 1.1%. Key highlights: 1) NII
came in 1% below GSe (+17% yoy, +15% yoy adjusted for one-off items) as
NIMs contracted by 10bp qoq to 4.1% on lower incremental LDR qoq at
67% and decline in CASA ratio of 173bp qoq due to higher growth in term
deposits; 2) Fee income came in 4% below GSe (+15% yoy) due to lower
TPP income; 3) On asset quality, gross NPLs increased 3% qoq on fresh
slippages of 0.8%, as part of the MFI loans were classified as NPLs. While
the specific provisioning coverage ratio declined marginally by 130bps qoq
to 81.3%, the bank provided c.Rs1.6bn towards floating provisions in 2Q,
taking the stock to 0.5% of net loans as of September.
What to do with the stock
We raise our FY12E-FY14E EPS by 3%-6% to factor in the lower loan loss
provisions, and raise our 12-m CAMELOT-based TP to Rs520 (from Rs500)
as we also roll forward our BVPS by one quarter to Sept 2012. We estimate
the bank to deliver earnings CAGR of 20% over FY12E-14E driven by
volumes growth of 25% CAGR and stable NIMs. While the bank continues
to have best-in-class operating metrics, we maintain our Sell rating as
valuations remain expensive (3.9X FY12E P/B and 22.4X FY12E P/E, at a 40-
50% premium to private banking peers) and we see higher upside
potential elsewhere in our coverage. Risks: Higher margins, lower cost of
operations.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HDFC Bank (HDBK.BO)
Sell Equity Research
Above expectations driven by lower provisions; valuations full
What surprised us
HDBK reported 2QFY12 PAT of Rs12bn (+31% yoy), 9% ahead of GSe and
in line with Bloomberg consensus on account of lower loan loss
provisioning at 0.8% of loans vs our estimate of 1.1%. Key highlights: 1) NII
came in 1% below GSe (+17% yoy, +15% yoy adjusted for one-off items) as
NIMs contracted by 10bp qoq to 4.1% on lower incremental LDR qoq at
67% and decline in CASA ratio of 173bp qoq due to higher growth in term
deposits; 2) Fee income came in 4% below GSe (+15% yoy) due to lower
TPP income; 3) On asset quality, gross NPLs increased 3% qoq on fresh
slippages of 0.8%, as part of the MFI loans were classified as NPLs. While
the specific provisioning coverage ratio declined marginally by 130bps qoq
to 81.3%, the bank provided c.Rs1.6bn towards floating provisions in 2Q,
taking the stock to 0.5% of net loans as of September.
What to do with the stock
We raise our FY12E-FY14E EPS by 3%-6% to factor in the lower loan loss
provisions, and raise our 12-m CAMELOT-based TP to Rs520 (from Rs500)
as we also roll forward our BVPS by one quarter to Sept 2012. We estimate
the bank to deliver earnings CAGR of 20% over FY12E-14E driven by
volumes growth of 25% CAGR and stable NIMs. While the bank continues
to have best-in-class operating metrics, we maintain our Sell rating as
valuations remain expensive (3.9X FY12E P/B and 22.4X FY12E P/E, at a 40-
50% premium to private banking peers) and we see higher upside
potential elsewhere in our coverage. Risks: Higher margins, lower cost of
operations.
No comments:
Post a Comment