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UCO Bank
For 2QFY2012, UCO Bank reported a 93.6% yoy increase (down 21.1% qoq) to
`231cr, above our estimates, mostly due to higher net interest income than
estimated by us. Calculated net interest margin witnessed a sharp sequential
improvement of 61bp. Asset quality of the bank, however, continued to be under
pressure as the bank switched over accounts worth `50lakhs and below to systembased
NPA during 2QFY2012. Gross NPA ratio as of 2QFY2012 stood at 3.6%
(3.5% in 1QFY2012), while net NPA ratio stood at 2.1% (2.1% in 1QFY2012). The
bank shrunk its loan portfolio during 2QFY2012, with advances declining by 0.6%
(up 12.5% yoy). Deposits for the bank grew by 3.0% qoq (up 8.5% yoy). At the
CMP, the stock is trading at 0.9x. We maintain our Neutral rating on the stock.
Jammu and Kashmir Bank
For 2QFY2012, J&K Bank reported healthy 22.3% growth in net profit to `200cr,
higher than our expectations, mostly on account of lower provisioning expenses
than estimated by us. Net interest income grew by healthy 16.5% yoy, however,
non-interest income declined by 4.4% yoy. The bank had already shifted to systembased
NPA recognition and, hence, did not see any material rise in its NPA ratios.
Gross NPA ratio as of 2QFY2012 stood at 1.8% (2.0% in 1QFY2012), while net
NPA ratio stood at 0.2% (0.2% in 1QFY2012). Provisioning coverage ratio
including technical write-offs stood at healthy 92.0%. At the CMP, the stock is
trading at 0.9x FY2013 ABV, which we feel factors in all the positives. Hence, we
maintain our Neutral view on the stock.
IPCA Labs
IPCA Labs reported higher-than-expected performance for 2QFY2012. The
company’s net sales came in at `618cr, reporting growth of 20.2% yoy, mainly driven
by exports, which grew by 40.4% yoy, with formulation and API segment registering
growth of 48.8% and 21.3%, respectively. Exports contributed around 57.1% of sales
in 2QFY2012 vs. 48.9% in 2QFY2011. Domestic sales, on the other hand, were flat at
`264.8cr mainly on the back of low yoy 3.3% growth in domestic formulation sales. At
the CMP, the stock trades at 12.7x FY2012E and 9.2x FY2013E, respectively. We
maintain our Buy recommendation on the stock with a target price of `358.
Vijaya Bank
For 2QFY2012, Vijaya Bank reported a decent set of numbers, which were
considerably higher than our expectations partly on account of interest income on
income tax refund of `75cr. Overall, results surprised positively with the absolute
amount of both gross and net NPAs declining sequentially. Advances growth was
healthy on a yoy basis at 36.4% and deposits growth was also ahead of peers at
24.1% yoy. Calculated NIM of the bank improved sharply by 35bp qoq. Gross and
net NPA ratios of the bank improved to 2.5% (from 2.8% in 1QFY2012) and 1.4%
(from 1.7% in 1QFY2012). Provision coverage ratio (including technical write-offs)
improved by ~270bp qoq to 66.1%. At the CMP, the stock is trading at 0.8x
FY2013E ABV. We maintain our Neutral stance on the stock.
Dena Bank
For 2QFY2012, Dena Bank registered healthy 20.5% yoy growth to `194cr, above
our estimates due to lower provisioning expenses than estimated by us. Reported
NIM increased by 32bp sequentially, leading to a 10.7% yoy increase in net
interest income to `515cr. Asset quality of the bank held up pretty well, in spite of
switchover to `50lakhs and below accounts to system-based NPA recognition
during 2QFY2012. Gross NPA ratio as of 2QFY2012 stood at 1.93% (1.86% in
1QFY2012) and net NPA ratio stood at 1.15% (1.08% in 1QFY2012). The pace in
business was slow during 2QFY2012, with advances growing by 0.3% qoq (18.0%
yoy) and deposits growing by 1.6% qoq (20.1% yoy). On the back of lower growth
in deposits, the bank was able to sequentially increase its CASA ratio by 45bp to
35.6%. At the CMP, the stock is trading at 0.6x FY2013 ABV. Currently, we have a
Neutral recommendation on the stock.
United Bank
For 2QFY2012, United Bank registered 13.7% yoy growth in its net profit to
`125cr, above our estimates due to higher non-interest income than estimated by
us. Calculated NIM improved by 24bp sequentially, leading to strong 9.6% qoq
growth in net interest income. Asset quality of the bank continued to be under
pressure during 2FY2012, with gross NPA ratio of 3.5% (2.9% in 1QFY2012) and
2.2% (1.7% in 1QFY2012). Advances growth for the bank was healthy at 17.3%
yoy and deposit growth came in at 13.3%. The bank’s operating expenses only
increased by 3.7% yoy due to which it was able to improve its cost-to-income ratio
to 42.7% compared to 47.7% in 1QFY2012. At the CMP, the stock is trading at
0.6x FY2013 ABV. We recommend an Accumulate rating on the stock with a target
price of `82. We may revise our target post the con-call/analyst meet.
Lakshmi Machine Works
Lakshmi Machine Works (LMW) reported strong top-line growth for 2QFY2012.
The company’s net sales grew by 31.2% yoy to `582cr (`443cr). LMW reported a
226bp yoy contraction in OPM to 15.3% (17.5%), largely on the back of increased
consumption of raw material as a percentage of sales by 342bp yoy to 59.8%
(56.4%).Operating profit increased by 14.3% yoy to `89cr (`78cr) on the back of
higher revenue during the quarter. Net profit increased by 7.4% yoy to `49cr
(`46cr). Net profit margin declined by 188bp yoy to 8.5% (10.4%). We continue to
maintain our Buy recommendation on the stock. We will be coming with a detailed
report post management interaction.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UCO Bank
For 2QFY2012, UCO Bank reported a 93.6% yoy increase (down 21.1% qoq) to
`231cr, above our estimates, mostly due to higher net interest income than
estimated by us. Calculated net interest margin witnessed a sharp sequential
improvement of 61bp. Asset quality of the bank, however, continued to be under
pressure as the bank switched over accounts worth `50lakhs and below to systembased
NPA during 2QFY2012. Gross NPA ratio as of 2QFY2012 stood at 3.6%
(3.5% in 1QFY2012), while net NPA ratio stood at 2.1% (2.1% in 1QFY2012). The
bank shrunk its loan portfolio during 2QFY2012, with advances declining by 0.6%
(up 12.5% yoy). Deposits for the bank grew by 3.0% qoq (up 8.5% yoy). At the
CMP, the stock is trading at 0.9x. We maintain our Neutral rating on the stock.
Jammu and Kashmir Bank
For 2QFY2012, J&K Bank reported healthy 22.3% growth in net profit to `200cr,
higher than our expectations, mostly on account of lower provisioning expenses
than estimated by us. Net interest income grew by healthy 16.5% yoy, however,
non-interest income declined by 4.4% yoy. The bank had already shifted to systembased
NPA recognition and, hence, did not see any material rise in its NPA ratios.
Gross NPA ratio as of 2QFY2012 stood at 1.8% (2.0% in 1QFY2012), while net
NPA ratio stood at 0.2% (0.2% in 1QFY2012). Provisioning coverage ratio
including technical write-offs stood at healthy 92.0%. At the CMP, the stock is
trading at 0.9x FY2013 ABV, which we feel factors in all the positives. Hence, we
maintain our Neutral view on the stock.
IPCA Labs
IPCA Labs reported higher-than-expected performance for 2QFY2012. The
company’s net sales came in at `618cr, reporting growth of 20.2% yoy, mainly driven
by exports, which grew by 40.4% yoy, with formulation and API segment registering
growth of 48.8% and 21.3%, respectively. Exports contributed around 57.1% of sales
in 2QFY2012 vs. 48.9% in 2QFY2011. Domestic sales, on the other hand, were flat at
`264.8cr mainly on the back of low yoy 3.3% growth in domestic formulation sales. At
the CMP, the stock trades at 12.7x FY2012E and 9.2x FY2013E, respectively. We
maintain our Buy recommendation on the stock with a target price of `358.
Vijaya Bank
For 2QFY2012, Vijaya Bank reported a decent set of numbers, which were
considerably higher than our expectations partly on account of interest income on
income tax refund of `75cr. Overall, results surprised positively with the absolute
amount of both gross and net NPAs declining sequentially. Advances growth was
healthy on a yoy basis at 36.4% and deposits growth was also ahead of peers at
24.1% yoy. Calculated NIM of the bank improved sharply by 35bp qoq. Gross and
net NPA ratios of the bank improved to 2.5% (from 2.8% in 1QFY2012) and 1.4%
(from 1.7% in 1QFY2012). Provision coverage ratio (including technical write-offs)
improved by ~270bp qoq to 66.1%. At the CMP, the stock is trading at 0.8x
FY2013E ABV. We maintain our Neutral stance on the stock.
Dena Bank
For 2QFY2012, Dena Bank registered healthy 20.5% yoy growth to `194cr, above
our estimates due to lower provisioning expenses than estimated by us. Reported
NIM increased by 32bp sequentially, leading to a 10.7% yoy increase in net
interest income to `515cr. Asset quality of the bank held up pretty well, in spite of
switchover to `50lakhs and below accounts to system-based NPA recognition
during 2QFY2012. Gross NPA ratio as of 2QFY2012 stood at 1.93% (1.86% in
1QFY2012) and net NPA ratio stood at 1.15% (1.08% in 1QFY2012). The pace in
business was slow during 2QFY2012, with advances growing by 0.3% qoq (18.0%
yoy) and deposits growing by 1.6% qoq (20.1% yoy). On the back of lower growth
in deposits, the bank was able to sequentially increase its CASA ratio by 45bp to
35.6%. At the CMP, the stock is trading at 0.6x FY2013 ABV. Currently, we have a
Neutral recommendation on the stock.
United Bank
For 2QFY2012, United Bank registered 13.7% yoy growth in its net profit to
`125cr, above our estimates due to higher non-interest income than estimated by
us. Calculated NIM improved by 24bp sequentially, leading to strong 9.6% qoq
growth in net interest income. Asset quality of the bank continued to be under
pressure during 2FY2012, with gross NPA ratio of 3.5% (2.9% in 1QFY2012) and
2.2% (1.7% in 1QFY2012). Advances growth for the bank was healthy at 17.3%
yoy and deposit growth came in at 13.3%. The bank’s operating expenses only
increased by 3.7% yoy due to which it was able to improve its cost-to-income ratio
to 42.7% compared to 47.7% in 1QFY2012. At the CMP, the stock is trading at
0.6x FY2013 ABV. We recommend an Accumulate rating on the stock with a target
price of `82. We may revise our target post the con-call/analyst meet.
Lakshmi Machine Works
Lakshmi Machine Works (LMW) reported strong top-line growth for 2QFY2012.
The company’s net sales grew by 31.2% yoy to `582cr (`443cr). LMW reported a
226bp yoy contraction in OPM to 15.3% (17.5%), largely on the back of increased
consumption of raw material as a percentage of sales by 342bp yoy to 59.8%
(56.4%).Operating profit increased by 14.3% yoy to `89cr (`78cr) on the back of
higher revenue during the quarter. Net profit increased by 7.4% yoy to `49cr
(`46cr). Net profit margin declined by 188bp yoy to 8.5% (10.4%). We continue to
maintain our Buy recommendation on the stock. We will be coming with a detailed
report post management interaction.
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