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N I M u p , c r e d i t g r o w t h s h a r p e r t h a n e x p e c t e d …
IDFC reported strong profits growing 19% YoY to | 383 crore in Q3FY12.
Improvement of 30 bps in NIM to 4.3% from 4% sequentially came as a
positive surprise. The NIM expansion and loan book growth of 25% YoY
and 12% QoQ led to NII growth of 17% YoY to | 546 crore. GNPA
doubled to | 148.3 crore from | 77 crore sequentially due to addition of a
single tourism account of | 70 crore. NNPA rose from | 36 crore to | 96.4
crore. Provisions increased substantially from | 63 crore to | 98 crore but
strong topline maintained profitability. The management has guided for
GNPA to remain under 1% for the next 18 months.
ƒ Loan growth, NII revised upwards...
The loan book grew 25% to | 43729 crore, which almost met our
FY12 targeted size. Growth came mainly from refinancing of road
sector loans and not fresh projects. We have revised our estimates
from the conservative growth of 15.4% to 20% in loan book to
| 454371 crore for FY12E and 22% for FY13E to | 55624 crore.
Hence, NII growth both from infra loans and treasury grew 14.5%
and 55% YoY to | 473 crore and | 73 crore, respectively. We have
revised NII growth upwards to ~9% for both FY12E and FY13E.
ƒ A look into investment book...
IDFC has a quoted an equity investment book of | 368 crore as on
FY11. Its current valuation is | 310 crore (CMP –February 21, 2012).
Andhra Cements, Jaypee Infratech, Torrent Power and JSW Energy
remain major investments in listed equity. The unquoted equity
book stands at | 488 crore excluding subsidiaries. NSE, Securities
Trading Corporation and ARCIL are key investments in the same. We
believe the unquoted equity book will result in substantial gains over
the next few years for IDFC.
V a l u a t i o n
Post strong NII growth, we have revised our PAT estimates from | 1794
crore to | 1842 crore for FY13E (20% CAGR over FY11-13E from 18%
earlier). The asset quality is expected to witness stress but overall
containment of GNPA to less than 1% over the next 18 months should
provide comfort on provisions. Return ratios remained strong with RoA at
3%. We have valued the loan book at 1.3x FY13E adjusted networth and
other subsidiaries on SOTP basis giving a TP of | 140 and HOLD rating.
http://content.icicidirect.com/mailimages/ICICIdirect_IDFC_Q3FY12.pdf
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
N I M u p , c r e d i t g r o w t h s h a r p e r t h a n e x p e c t e d …
IDFC reported strong profits growing 19% YoY to | 383 crore in Q3FY12.
Improvement of 30 bps in NIM to 4.3% from 4% sequentially came as a
positive surprise. The NIM expansion and loan book growth of 25% YoY
and 12% QoQ led to NII growth of 17% YoY to | 546 crore. GNPA
doubled to | 148.3 crore from | 77 crore sequentially due to addition of a
single tourism account of | 70 crore. NNPA rose from | 36 crore to | 96.4
crore. Provisions increased substantially from | 63 crore to | 98 crore but
strong topline maintained profitability. The management has guided for
GNPA to remain under 1% for the next 18 months.
ƒ Loan growth, NII revised upwards...
The loan book grew 25% to | 43729 crore, which almost met our
FY12 targeted size. Growth came mainly from refinancing of road
sector loans and not fresh projects. We have revised our estimates
from the conservative growth of 15.4% to 20% in loan book to
| 454371 crore for FY12E and 22% for FY13E to | 55624 crore.
Hence, NII growth both from infra loans and treasury grew 14.5%
and 55% YoY to | 473 crore and | 73 crore, respectively. We have
revised NII growth upwards to ~9% for both FY12E and FY13E.
ƒ A look into investment book...
IDFC has a quoted an equity investment book of | 368 crore as on
FY11. Its current valuation is | 310 crore (CMP –February 21, 2012).
Andhra Cements, Jaypee Infratech, Torrent Power and JSW Energy
remain major investments in listed equity. The unquoted equity
book stands at | 488 crore excluding subsidiaries. NSE, Securities
Trading Corporation and ARCIL are key investments in the same. We
believe the unquoted equity book will result in substantial gains over
the next few years for IDFC.
V a l u a t i o n
Post strong NII growth, we have revised our PAT estimates from | 1794
crore to | 1842 crore for FY13E (20% CAGR over FY11-13E from 18%
earlier). The asset quality is expected to witness stress but overall
containment of GNPA to less than 1% over the next 18 months should
provide comfort on provisions. Return ratios remained strong with RoA at
3%. We have valued the loan book at 1.3x FY13E adjusted networth and
other subsidiaries on SOTP basis giving a TP of | 140 and HOLD rating.
http://content.icicidirect.com/mailimages/ICICIdirect_IDFC_Q3FY12.pdf
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