Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L a r g e r e s t r u c t u r e d b o o k t o w e i g h o n P A T …
Net profit surged to | 715 crore, up 45% QoQ, much above the estimated
| 532 crore. Lower provisions at | 693 crore in Q3FY12 vs. | 1154 crore in
Q2FY12 and our estimated | 744 crore, resulted in higher profit growth.
Non interest income came strong at | 852 crore growing 31% YoY due to
robust recoveries of | 185 crore. The saga of GNPA addition continues
with net | 520 crore of fresh slippages, mainly factoring aviation sector.
Restructured assets (RA) increased further from |11115 crore to | 13673
crore (5.94% of advances) with | 3000 crore fresh restructuring coming
from one large telecom infra account and a media company. Around 23%
of RA has already slipped to NPA and further restructuring cannot be
ruled out keeping the NPA uptick on and with higher provisions
continuing. We have revised our PAT estimates by ~10% for both FY12E
and FY13E factoring in higher provisions from restructured assets, raising
non interest income and lowering operating expenses as the cost to
income ratio has improved to ~40% from 44% in Q1 and 47% in Q3FY11.
ƒ Asset quality pressure continues, incremental slippages lower…
On a sequential basis, GNPA declined to | 6386 crore from | 6548
crore and the ratio improved to 2.74% from 3.02% as recoveries
and upgrades remained strong. NNPA also improved to | 4093 crore
at 1.78% from 1.98%. We expect slippage ratio of 1.9% against 2%
earlier and estimate GNPA @ 2.4% and NNPA @ 1.3% by FY13E.
ƒ International credit leads to 19.5% jump in global advances…
While domestic advances grew 8% YoY and 3.5% QoQ, foreign
loans grew 60% YoY and 13% QoQ leading to total credit growth of
21.67% to | 230354 crore (overseas book - 29% of global advances).
Impact of rupee depreciation is close to 20%. Deposits increased
2.7% QoQ (21.7% YoY) to | 299074 crore. Hence, NII grew 4.1%
YoY and 8.6% QoQ to | 2068 crore while NIM maintained its
improving trend rising 11 bps QoQ to 2.55%, from 2.44% in
Q2FY12. Retail and SME credit growth aided NIM increase. We
expect reported NIM to stabilise at 2.5-2.6% for FY12E.
V a l u a t i o n
We expect the adjusted book value to remain suppressed due to higher
NPAs and restructured book at 5.94% of advances. Even Tier I Capital at
7.65% will impact growth. RoA at 0.8% and RoE at 17% for FY13E restrict
the valuation to 1.2x FY13E ABV. We maintain our target price of | 331
and our HOLD rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L a r g e r e s t r u c t u r e d b o o k t o w e i g h o n P A T …
Net profit surged to | 715 crore, up 45% QoQ, much above the estimated
| 532 crore. Lower provisions at | 693 crore in Q3FY12 vs. | 1154 crore in
Q2FY12 and our estimated | 744 crore, resulted in higher profit growth.
Non interest income came strong at | 852 crore growing 31% YoY due to
robust recoveries of | 185 crore. The saga of GNPA addition continues
with net | 520 crore of fresh slippages, mainly factoring aviation sector.
Restructured assets (RA) increased further from |11115 crore to | 13673
crore (5.94% of advances) with | 3000 crore fresh restructuring coming
from one large telecom infra account and a media company. Around 23%
of RA has already slipped to NPA and further restructuring cannot be
ruled out keeping the NPA uptick on and with higher provisions
continuing. We have revised our PAT estimates by ~10% for both FY12E
and FY13E factoring in higher provisions from restructured assets, raising
non interest income and lowering operating expenses as the cost to
income ratio has improved to ~40% from 44% in Q1 and 47% in Q3FY11.
ƒ Asset quality pressure continues, incremental slippages lower…
On a sequential basis, GNPA declined to | 6386 crore from | 6548
crore and the ratio improved to 2.74% from 3.02% as recoveries
and upgrades remained strong. NNPA also improved to | 4093 crore
at 1.78% from 1.98%. We expect slippage ratio of 1.9% against 2%
earlier and estimate GNPA @ 2.4% and NNPA @ 1.3% by FY13E.
ƒ International credit leads to 19.5% jump in global advances…
While domestic advances grew 8% YoY and 3.5% QoQ, foreign
loans grew 60% YoY and 13% QoQ leading to total credit growth of
21.67% to | 230354 crore (overseas book - 29% of global advances).
Impact of rupee depreciation is close to 20%. Deposits increased
2.7% QoQ (21.7% YoY) to | 299074 crore. Hence, NII grew 4.1%
YoY and 8.6% QoQ to | 2068 crore while NIM maintained its
improving trend rising 11 bps QoQ to 2.55%, from 2.44% in
Q2FY12. Retail and SME credit growth aided NIM increase. We
expect reported NIM to stabilise at 2.5-2.6% for FY12E.
V a l u a t i o n
We expect the adjusted book value to remain suppressed due to higher
NPAs and restructured book at 5.94% of advances. Even Tier I Capital at
7.65% will impact growth. RoA at 0.8% and RoE at 17% for FY13E restrict
the valuation to 1.2x FY13E ABV. We maintain our target price of | 331
and our HOLD rating on the stock.
No comments:
Post a Comment