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S t r o n g c r e d i t g r o w t h , C A S A u p t i c k s e e n … .
The strong performance of the financing businesses continues to drive
consolidated PAT growing 21% YoY and 6% QoQ to | 463 crore.
Standalone bank PAT jumped 47% YoY and 6.2% QoQ to | 276 crore.
The banking and financing business had 85% contribution (| 276 crore
and | 104 crore) in consolidated PAT. Savings rate hike impacted margins
that dipped to 4.7% from 4.8% sequentially but savings balance also rose
sharply leading to CASA portion surging to 28% from 26%. We remain
bullish on the banking business. However, an unfavourable environment
is impairing the capital market and related businesses. GNPA and NNPA
remained stable at 1.52% and 0.56% but increased 16% and 22% in
absolute values to | 439 crore and | 196 crore, respectively.
We have revised our FY12E credit growth to 31% from 25% and raised
PAT by 10% to | 1037 crore for FY12E and to |1316 crore for FY13E.
Robust non interest income, higher NII support bottomline….
Better forex income and higher recoveries from written off and stressed
assets led to non interest income growing 41% YoY and 33% QoQ to |
281.9 crore.
Deposits also grew a healthy 36% YoY and 5.5% QoQ to | 38385 crore
with CASA rising to 28% from 26% sequentially. Savings balance grew
24% in the quarter to | 4426 crore from | 3564 crore. Strong credit
growth of 38% YoY and 6.5% QoQ to | 39772 crore were driven by
CV/CE, personal loans and agriculture credit (Exhibit 3).
NII grew 21.3% YoY and 7.6% QoQ to | 651.5 crore. A structural shift to
higher collateralised credit portfolio and higher savings rate led to NIM
dipping to 4.7% from 4.8% sequentially. The bank expects to maintain
margins around these levels.
We expect 27% and 28% CAGR in advances and deposits leading to 23%
CAGR NII growth and 27% CAGR PAT growth over FY11-13E.
V a l u a t i o n
In spite of a strong lending business performance and rising life insurance
profitability (| 124 crore in 9MFY12), the consolidated valuation was
marred by capital market linked businesses. This is resulting in
consolidated RoE of 15.8% for FY13E. We maintain the target price at
| 436 on an SOTP basis and recommend SELL on the stock
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t r o n g c r e d i t g r o w t h , C A S A u p t i c k s e e n … .
The strong performance of the financing businesses continues to drive
consolidated PAT growing 21% YoY and 6% QoQ to | 463 crore.
Standalone bank PAT jumped 47% YoY and 6.2% QoQ to | 276 crore.
The banking and financing business had 85% contribution (| 276 crore
and | 104 crore) in consolidated PAT. Savings rate hike impacted margins
that dipped to 4.7% from 4.8% sequentially but savings balance also rose
sharply leading to CASA portion surging to 28% from 26%. We remain
bullish on the banking business. However, an unfavourable environment
is impairing the capital market and related businesses. GNPA and NNPA
remained stable at 1.52% and 0.56% but increased 16% and 22% in
absolute values to | 439 crore and | 196 crore, respectively.
We have revised our FY12E credit growth to 31% from 25% and raised
PAT by 10% to | 1037 crore for FY12E and to |1316 crore for FY13E.
Robust non interest income, higher NII support bottomline….
Better forex income and higher recoveries from written off and stressed
assets led to non interest income growing 41% YoY and 33% QoQ to |
281.9 crore.
Deposits also grew a healthy 36% YoY and 5.5% QoQ to | 38385 crore
with CASA rising to 28% from 26% sequentially. Savings balance grew
24% in the quarter to | 4426 crore from | 3564 crore. Strong credit
growth of 38% YoY and 6.5% QoQ to | 39772 crore were driven by
CV/CE, personal loans and agriculture credit (Exhibit 3).
NII grew 21.3% YoY and 7.6% QoQ to | 651.5 crore. A structural shift to
higher collateralised credit portfolio and higher savings rate led to NIM
dipping to 4.7% from 4.8% sequentially. The bank expects to maintain
margins around these levels.
We expect 27% and 28% CAGR in advances and deposits leading to 23%
CAGR NII growth and 27% CAGR PAT growth over FY11-13E.
V a l u a t i o n
In spite of a strong lending business performance and rising life insurance
profitability (| 124 crore in 9MFY12), the consolidated valuation was
marred by capital market linked businesses. This is resulting in
consolidated RoE of 15.8% for FY13E. We maintain the target price at
| 436 on an SOTP basis and recommend SELL on the stock
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