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India Equity Research Reports, IPO and Stock News
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P A T s u r g e s o n a c c o u nt o f o t h e r i n c o m e …
IDFC’s core performance was in line with estimates but non-interest
income witnessed a surge of 45% YoY to | 393 crore, thereby supporting
55% YoY growth in PAT to | 524.7 crore (I-direct estimate: | 308.8 crore).
NII grew 33.2% YoY to | 498 crore in line with estimates on account of a
10 bps improvement in NIM to 4%. Loan book growth was, however,
subdued (up 14.3% YoY vs. our estimate of 18% growth). Asset quality
was stable with absolute GNPA maintained at | 77.6 crore and GNPA ratio
at 0.2%. Provisions came in line with estimates at | 63 crore. We believe
the ongoing stress on the infrastructure sector could pressurise asset
quality. Hence, we have revised our PAT estimates from | 1858 crore to |
1794 crore (18% CAGR over FY11-13E).
ƒ Principal investment boosts profitability...
Non-interest income increased from | 122 crore in Q1FY12 to | 393
crore in Q2FY12 on the back of a sharp rise in income from principal
investment worth | 243 crore. Profit worth | 240 crore was booked
on account of ~1.1% NSE stake sale. However, if we exclude
principal investment, non-interest income has seen a 42% YoY drop
on account of a fall in investment banking fees. Proportion of noninterest income in total income was high at 44% due to this one-off.
We expect proportion of non-interest income at 30% for FY13E.
ƒ Loan book growth to remain under pressure….
The loan book grew 14.3% to | 39313 crore, which was lower than
our estimate of | 40589 crore. The major culprit for this slowdown
was de-growth of 3% YoY in the corporate loan book to | 14307
crore. Considering the gloomy atmosphere in the infrastructure
sector, we have estimated conservative growth of 15.4% in the loan
book to | 43463 crore for FY12E.
V a l u a t i o n
We expect the management to achieve profit growth at 18% CAGR over
FY11-13E to | 1794 crore. Although asset quality has been healthy so far,
stress on the infrastructure sector could impact NPA, which is weighing
on valuations. Return ratios were strong in Q2FY12 with RoA of 4.1% and
RoE of 12.7%. We expect this to remain healthy at RoA of 2.9% and RoE
of 13.8% for FY13E.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P A T s u r g e s o n a c c o u nt o f o t h e r i n c o m e …
IDFC’s core performance was in line with estimates but non-interest
income witnessed a surge of 45% YoY to | 393 crore, thereby supporting
55% YoY growth in PAT to | 524.7 crore (I-direct estimate: | 308.8 crore).
NII grew 33.2% YoY to | 498 crore in line with estimates on account of a
10 bps improvement in NIM to 4%. Loan book growth was, however,
subdued (up 14.3% YoY vs. our estimate of 18% growth). Asset quality
was stable with absolute GNPA maintained at | 77.6 crore and GNPA ratio
at 0.2%. Provisions came in line with estimates at | 63 crore. We believe
the ongoing stress on the infrastructure sector could pressurise asset
quality. Hence, we have revised our PAT estimates from | 1858 crore to |
1794 crore (18% CAGR over FY11-13E).
ƒ Principal investment boosts profitability...
Non-interest income increased from | 122 crore in Q1FY12 to | 393
crore in Q2FY12 on the back of a sharp rise in income from principal
investment worth | 243 crore. Profit worth | 240 crore was booked
on account of ~1.1% NSE stake sale. However, if we exclude
principal investment, non-interest income has seen a 42% YoY drop
on account of a fall in investment banking fees. Proportion of noninterest income in total income was high at 44% due to this one-off.
We expect proportion of non-interest income at 30% for FY13E.
ƒ Loan book growth to remain under pressure….
The loan book grew 14.3% to | 39313 crore, which was lower than
our estimate of | 40589 crore. The major culprit for this slowdown
was de-growth of 3% YoY in the corporate loan book to | 14307
crore. Considering the gloomy atmosphere in the infrastructure
sector, we have estimated conservative growth of 15.4% in the loan
book to | 43463 crore for FY12E.
V a l u a t i o n
We expect the management to achieve profit growth at 18% CAGR over
FY11-13E to | 1794 crore. Although asset quality has been healthy so far,
stress on the infrastructure sector could impact NPA, which is weighing
on valuations. Return ratios were strong in Q2FY12 with RoA of 4.1% and
RoE of 12.7%. We expect this to remain healthy at RoA of 2.9% and RoE
of 13.8% for FY13E.
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