Buy IDFC at Rs 166.7 and add on dips to Rs 140 - Rs 147 for Target of Rs 187 in 1 quarter & Rs 222 in 3-4 quarters ::HDFC Sec, report

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NII growth come down; NIMs and spreads continue to fall slightly Net Interest Income (NII) growth during Q3FY15 has come down 0.5% y-o-y and up 2% q-o-q to Rs 661 cr with net loan book down 2.9% y-o-y. Treasury income continues to do well with a jump from Rs 54 cr in Q3FY14 and Rs 90 cr in Q2FY15 to Rs 95 cr in Q3FY15. Rolling 12 months NIMs and average spreads have come down slightly to 3.7% and 2% respectively.

Non Interest Income up to Rs 317 cr Non-interest income which comprises of Principal Gains, Asset Management, Investment Banking, Fixed Income and Loan Related Fees has gone up from Rs 187 cr in Q3FY14 to Rs 317 cr in Q3FY15 but down from Rs 449 cr in Q2FY15. The y-o-y gains have been mostly on account fixed income and asset management fees. Fixed income stood at Rs 128 cr in Q3FY15. Investment banking and broking was down from Rs 24 cr in Q2FY15 and Rs 19 cr in Q3FY14 to Rs 13 cr in Q3FY15. Other income for the nine month ended December 2014 includes profit Rs. 1 cr on transfer of its stake in IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited to IDFC Alternatives Limited, a subsidiary of the Company.

Net Loan book down 2.9% y-o-y Net Loan Book has come down 2.9% y-o-y to Rs 52,007 cr. Disbursements have come down 2% y-o-y. Outstanding disbursements to the energy sectors have remained stable at 41% y-o-y. Transportation sector too has remained almost flattish at 23%. Management has guided for modest growth in infrastructure loans. Cumulative outstanding approvals have come down 7.6% y-o-y to Rs 74882 cr. Energy continues to have the maximum exposure at 37% in Q3FY15 compared to 33% in Q3FY14. Exposure in Transportation too has remained in the range of 22-23%. Telecom has seen minor cut-back from 28% to 24% y-o-y

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3011199