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1QFY2012 Result Review
ICICI Bank
For 1QFY2012, ICICI Bank’s standalone net profit grew by healthy 29.8% yoy to `1,332cr,
below our as well as street’s estimates, mainly on account of lower operating income.
Moderate NIM compression with largely stable asset quality and continued reduction in
NPA provisioning burden were the key highlights of the results.
Moderate NIM compression; stable asset quality lead to lower provisioning burden
During 1QFY2012, the momentum in the bank’s business slowed a bit, in-line with its
peers. The bank’s advances increased by 19.7% yoy, while deposits grew by 14.8% yoy.
Saving account deposits growth, though moderated in 1QFY2012, was healthy at 18.2%
yoy. Though period-end CASA ratio came off by 320bp qoq to 41.9%, average CASA ratio
improved by ~50bp qoq to 40%. Reported NIM declined by 10bp qoq to 2.6% due to
higher cost of deposits. Growth in fee income was below expectations at 11.7% yoy.
Employee expenses were on the higher side due to hike in salary and higher headcount,
leading to an increase in cost-to-income ratio to 44.9% from 40.4% in 1QFY2011.
Provisioning expenses declined by 43.1% yoy despite the bank having to provide `145cr
for the recent hike in regulatory provisioning requirements. Gross NPAs declined
marginally by 0.5% qoq, while net NPAs decreased by 4.4% qoq. The provision coverage
ratio (as per the RBI’s guidelines) improved to 76.9%.
At the CMP, the bank’s core banking business (after adjusting for subsidiaries) is trading at
1.9x FY2013E ABV (including subsidiaries also, at 1.9x FY2013E ABV). We maintain our
Buy rating on the stock with a target price of `1,324.
SAIL
SAIL reported disappointing profitability for 1QFY2012. Net sales grew by 19.7% yoy to
`10,811cr (higher our estimates of `9,405cr) mainly due to increased sales volumes
(+16.7% yoy to 2.8mn tonnes). Realisation grew by 2.6% yoy to `38,611/tonne. However,
EBITDA dipped by 28.8% yoy to `1,312cr, as EBITDA margin declined by massive 827bp
yoy to 12.1% (significantly below our estimate of 17.1%) mainly due to increased coking
coal costs. EBITDA/tonne stood at `4,687 in 1QFY2012 compared to `7,679 in
1QFY2011. Net profit decreased by 28.9% yoy to `839cr (below our estimate of `1,029cr)
in 1QFY2012. With results significantly below our estimates, we keep our rating and target
price under review.
Nestle 2QCY2011
Nestle reported mixed set of numbers, beating our revenue expectation upwards by ~2%.
Earnings estimate came in lower by ~12%. The company’s top line grew by 20.2% yoy
and stood at `1,763cr, while earnings grew by disappointing ~10% yoy and stood at
`214cr (against our expectation of ~24% yoy growth). Operating margin contracted due
to raw-material price inflation. We maintain our Reduce view on the stock with a target
price of `3,483.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
1QFY2012 Result Review
ICICI Bank
For 1QFY2012, ICICI Bank’s standalone net profit grew by healthy 29.8% yoy to `1,332cr,
below our as well as street’s estimates, mainly on account of lower operating income.
Moderate NIM compression with largely stable asset quality and continued reduction in
NPA provisioning burden were the key highlights of the results.
Moderate NIM compression; stable asset quality lead to lower provisioning burden
During 1QFY2012, the momentum in the bank’s business slowed a bit, in-line with its
peers. The bank’s advances increased by 19.7% yoy, while deposits grew by 14.8% yoy.
Saving account deposits growth, though moderated in 1QFY2012, was healthy at 18.2%
yoy. Though period-end CASA ratio came off by 320bp qoq to 41.9%, average CASA ratio
improved by ~50bp qoq to 40%. Reported NIM declined by 10bp qoq to 2.6% due to
higher cost of deposits. Growth in fee income was below expectations at 11.7% yoy.
Employee expenses were on the higher side due to hike in salary and higher headcount,
leading to an increase in cost-to-income ratio to 44.9% from 40.4% in 1QFY2011.
Provisioning expenses declined by 43.1% yoy despite the bank having to provide `145cr
for the recent hike in regulatory provisioning requirements. Gross NPAs declined
marginally by 0.5% qoq, while net NPAs decreased by 4.4% qoq. The provision coverage
ratio (as per the RBI’s guidelines) improved to 76.9%.
At the CMP, the bank’s core banking business (after adjusting for subsidiaries) is trading at
1.9x FY2013E ABV (including subsidiaries also, at 1.9x FY2013E ABV). We maintain our
Buy rating on the stock with a target price of `1,324.
SAIL
SAIL reported disappointing profitability for 1QFY2012. Net sales grew by 19.7% yoy to
`10,811cr (higher our estimates of `9,405cr) mainly due to increased sales volumes
(+16.7% yoy to 2.8mn tonnes). Realisation grew by 2.6% yoy to `38,611/tonne. However,
EBITDA dipped by 28.8% yoy to `1,312cr, as EBITDA margin declined by massive 827bp
yoy to 12.1% (significantly below our estimate of 17.1%) mainly due to increased coking
coal costs. EBITDA/tonne stood at `4,687 in 1QFY2012 compared to `7,679 in
1QFY2011. Net profit decreased by 28.9% yoy to `839cr (below our estimate of `1,029cr)
in 1QFY2012. With results significantly below our estimates, we keep our rating and target
price under review.
Nestle 2QCY2011
Nestle reported mixed set of numbers, beating our revenue expectation upwards by ~2%.
Earnings estimate came in lower by ~12%. The company’s top line grew by 20.2% yoy
and stood at `1,763cr, while earnings grew by disappointing ~10% yoy and stood at
`214cr (against our expectation of ~24% yoy growth). Operating margin contracted due
to raw-material price inflation. We maintain our Reduce view on the stock with a target
price of `3,483.
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