Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_RelianceCapital_Q3FY12.pdf
I m p r o v e m e n t i n b u s i n e s s e s o n t r a c k …
AMC, consumer finance & distribution segment results were strong but
general insurance again reported a loss at the PBT level of | 34.4 crore.
Consolidated PAT declined 43.4% YoY but surged 80% QoQ to | 60.2
crore (I-direct estimate: | 36.7 crore). Higher interest costs and general
insurance led to lower profit in spite of a robust topline of | 1583 crore
against our estimate of | 1422 crore.
Nippon Life has committed the largest FDI in the Indian mutual fund
sector till date (| 1450 crore) buying a 26% stake in Reliance MF. It is the
second investment by the company after it deployed | 3000 crore to
acquire a 26% stake in Reliance Life in 2011.
We re-iterate our BUY rating on the stock with a target price of | 466.
ƒ Funds raised via life insurance stake sale, capital gains in Q4FY12…
Capital gains from Nippon Life deal will be reflected in Q4FY12E PAT
leading to higher FY12E PAT. Also, by FY12 end, restructuring of stake in
Reliance Life will lead to direct ownership of 38% by Reliance capital vs.
16% now. We have factored in capital gains of ~| 400 crore in FY12 from
this deal. The business has reported PBT of | 10.1 crore in Q3FY12 with
incrementally 70% business coming from traditional policies. Adjusted
premium equivalent (APE) declined 17% YoY to | 321 crore in Q3FY12.
ƒ Asset management remains largest profit contributor
Nippon Life seems to have valued Reliance Life at 6.7% of the current
AUM, which is higher than deals done in the recent past. We believe
that as Reliance AMC’s equity proportion is higher at 32%, the
valuations are fair. AUM declined further to | 82,300 crore, declining
12% QoQ from | 93,100 crore but PBT increased by 7% to | 70 crore.
Consolidated PBT stands at | 103 crore, making the AMC the largest
contributor to PBT.
V a l u a t i o n
Most subsidiaries except general insurance have gained size and are now
generating profits. Capital gains from the life and AMC stake sale will keep
on adding to profits. We remain bullish on the company and maintain our
SOTP target of | 466 and recommend BUY
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_RelianceCapital_Q3FY12.pdf
I m p r o v e m e n t i n b u s i n e s s e s o n t r a c k …
AMC, consumer finance & distribution segment results were strong but
general insurance again reported a loss at the PBT level of | 34.4 crore.
Consolidated PAT declined 43.4% YoY but surged 80% QoQ to | 60.2
crore (I-direct estimate: | 36.7 crore). Higher interest costs and general
insurance led to lower profit in spite of a robust topline of | 1583 crore
against our estimate of | 1422 crore.
Nippon Life has committed the largest FDI in the Indian mutual fund
sector till date (| 1450 crore) buying a 26% stake in Reliance MF. It is the
second investment by the company after it deployed | 3000 crore to
acquire a 26% stake in Reliance Life in 2011.
We re-iterate our BUY rating on the stock with a target price of | 466.
ƒ Funds raised via life insurance stake sale, capital gains in Q4FY12…
Capital gains from Nippon Life deal will be reflected in Q4FY12E PAT
leading to higher FY12E PAT. Also, by FY12 end, restructuring of stake in
Reliance Life will lead to direct ownership of 38% by Reliance capital vs.
16% now. We have factored in capital gains of ~| 400 crore in FY12 from
this deal. The business has reported PBT of | 10.1 crore in Q3FY12 with
incrementally 70% business coming from traditional policies. Adjusted
premium equivalent (APE) declined 17% YoY to | 321 crore in Q3FY12.
ƒ Asset management remains largest profit contributor
Nippon Life seems to have valued Reliance Life at 6.7% of the current
AUM, which is higher than deals done in the recent past. We believe
that as Reliance AMC’s equity proportion is higher at 32%, the
valuations are fair. AUM declined further to | 82,300 crore, declining
12% QoQ from | 93,100 crore but PBT increased by 7% to | 70 crore.
Consolidated PBT stands at | 103 crore, making the AMC the largest
contributor to PBT.
V a l u a t i o n
Most subsidiaries except general insurance have gained size and are now
generating profits. Capital gains from the life and AMC stake sale will keep
on adding to profits. We remain bullish on the company and maintain our
SOTP target of | 466 and recommend BUY
No comments:
Post a Comment