Professional Documents
Culture Documents
16 AUG 2016
BANKS
Rs 114
Rs 108
Nifty
8,672
Sensex
28,152
OBC IN
346
39/589
449
Rs 184/75
3M
6M
12M
Absolute (%)
34.9
38.9
(29.6)
Relative (%)
25.8
16.4
(31.9)
58.38
21.92
FIIs
Public & Others
Source : BSE
Parul Gulati
parul.gulati@hdfcsec.com
+91-22-6171-7322
Darpin Shah
darpin.shah@hdfcsec.com
+91-22-6171-7328
Siji Philip
siji.philip@hdfcsec.com
+91-22-6171-7324
7.63
12.07
1QFY17
12,046
9,171
1,007
3.1
1QFY16
13,285
10,445
2,578
8.6
YoY (%)
-9.3%
-12.2%
-60.9%
-63.6%
QoQ (%)
-11.0%
4.4%
365.7%
365.7%
FY15
50,842
42,271
4,971
16.6
3.8
0.34
278.2
0.31
5.1
FY16P
53,746
36,821
1,561
4.5
1.2
0.07
138.1
0.82
25.2
FY17E
53,538
37,462
4,161
12.0
3.0
0.17
109.4
1.04
9.5
FY18E
59,614
41,145
7,510
21.7
5.2
0.29
154.0
0.74
5.2
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
segments: Corporate (1/-1% YoY/QoQ), SME (9/6% YoY/QoQ), and Agriculture (-8/-5% YoY/QoQ).
Constrained capital Tier I 9.2% (though relatively
better) and NPA provisioning would conatin loan
growth at a modest 8.5/12% in FY16/FY17.
Page | 2
1QFY16
13,285
4,539
1,013
17,824
7,380
10,445
5,777
5,958
4,668
2,090
2QFY16
13,831
4,246
1,283
18,076
8,151
9,925
5,694
4,761
4,231
1,218
3QFY16
13,093
3,945
1,182
17,038
9,375
7,664
11,831
14,504
(4,167)
80
4QFY16
13,537
4,933
1,372
18,469
9,682
8,787
10,261
10,865
(1,474)
(1,690)
1QFY17
12,046
6,138
1,626
18,184
9,013
9,171
7,504
9,609
1,667
660
YoY Growth
-9.3%
35.2%
60.6%
2.0%
22.1%
-12.2%
29.9%
61.3%
-64.3%
-68.4%
QoQ Growth
-11.0%
24.4%
18.5%
-1.5%
-6.9%
4.4%
-26.9%
-11.6%
-213.1%
-139.1%
2,578
3,013
(4,247)
216
1,007
-60.9%
365.7%
1,960
475
1,465
74.8
11.1
8.6
1,992
497
1,501
75.3
10.8
8.4
2,065
510
1,525
73.9
11.1
8.2
2,089
527
1,489
71.3
11.8
9.1
2,045
530
1,503
73.5
12.4
9.2
4.4%
11.7%
2.6%
-129 bps
133 bps
57 bps
-2.1%
0.6%
1.0%
223 bps
64 bps
6 bps
11.6
7.5
2.7
41.4
44.8
11.4
7.3
2.8
45.1
28.8
11.0
7.1
2.6
55.0
(1.9)
10.8
6.9
2.7
52.4
114.7
10.6
6.7
2.4
49.6
39.6
-100 bps
-79 bps
-29 bps
816 bps
-517 bps
-17 bps
-16 bps
-29 bps
-286 bps
-7508 bps
85.8
53.6
5.85
3.76
4.3
37.5
85.6
51.9
5.70
3.55
2.1
39.4
118.2
73.6
7.75
4.99
10.5
37.8
147.0
99.3
9.57
6.70
10.7
32.4
172.1
117.3
11.45
8.11
9.3
31.8
100.6%
119.0%
560 bps
435 bps
491 bps
-572 bps
17.1%
18.1%
188 bps
141 bps
-141 bps
-63 bps
Change In Estimates
(Rsmn)
Old
NII
54,777
PPOP
38,201
PAT
4,524
Adj. BVPS (Rs)
125
Source: HDFC sec Inst Research
FY17E
New
53,538
37,462
4,161
109.4
FY18E
Change
-2.3%
-1.9%
-8.0%
-12.8%
Old
60,656
42,054
7,608
160
New
59,614
41,145
7,510
154
Change
-1.7%
-2.2%
-1.3%
-3.5%
Page | 3
12.0
1,400
10.0
1,300
8.0
1,200
6.0
1,100
4.0
1,000
2.0
Retail TD
SA
CA
41
36
41
42
40
38
39
39
36
35
35
34
31
35
40
35
34
36
38
37
37
40
41
40
41
43
18
18
18
18
18
19
18
18
18
19
18
19
20
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
12
10
8
6
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
3QFY14
2QFY14
2,200
2,100
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1QFY14
SME
19.3%
Corporate
53.9%
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
Retail
12.2%
Agri
13.7%
3QFY14
900
Others
1.0%
14.0
1,500
2QFY14
1,600
1QFY14
Page | 4
Yield on Advances
NIM (RHS)
20.0
13.0
14.0
15.0
13.0
10.0
11.0
12.0
5.0
10.0
2.8
2.6
2.4
8.0
7.0
2.2
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
2.0
1QFY14
1QFY17
4QFY16
3QFY16
5.0
2QFY16
(15.0)
1QFY16
8.0
4QFY15
6.0
3QFY15
(10.0)
2QFY15
9.0
1QFY15
(5.0)
4QFY14
10.0
3QFY14
3.0
9.0
2QFY14
12.0
11.0
Cost of Deposits
4QFY14
Rs bn
1QFY14
3QFY14
2QFY14
Rs bn
4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17
Fee
2.8
2.2
2.4
2.0
2.5
2.4
2.1
2.1
2.5
2.5
%Loan Ann.
0.82
0.63
0.68
0.57
0.70
0.65
0.56
0.54
0.67
0.66
Treasury
0.3
1.2
0.6
2.0
2.2
1.0
1.3
1.2
1.4
1.6
Others
0.6
0.7
0.3
0.4
0.3
0.5
0.4
0.7
0.3
0.6
Recovery
3.9
1.8
0.6
0.7
1.3
0.6
0.5
0.5
0.8
1.5
Total
8
6
4
5
6
5
4.2
3.9
4.9
6.1
YoY %
63%
9%
26%
50%
-17%
-23%
8%
-23%
-22%
35%
Source: Bank, HDFC sec Inst Research
YoY %
4%
QoQ %
-2%
61%
7%
142%
35%
19%
104%
91%
24%
Page | 5
4.0
2.0
1QFY17
4QFY16
3QFY16
2QFY16
1QFY17
4QFY16
3QFY16
2QFY16
1QFY16
4QFY15
3QFY15
2QFY15
1QFY15
4QFY14
30.0
3QFY14
0.5
2QFY14
35.0
1QFY14
1.0
6.0
1QFY16
40.0
4QFY15
1.5
8.0
3QFY15
45.0
10.0
2QFY15
2.0
1QFY15
50.0
200.0
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
-
4QFY14
55.0
2.5
3QFY14
1QFY14
3.0
2QFY14
YoY %
61%
QoQ %
-12%
-82%
385%
30%
-47%
211%
-27%
-68%
-139%
YoY %
QoQ %
116%
-14%
-9%
53%
88%
100%
233%
-33%
-42%
17%
Page | 6
2.5
500
2.0
400
1.5
+1SD
300
Aug-16
Aug-15
Aug-14
Aug-13
Aug-12
0.0
Aug-11
Aug-16
Aug-15
Aug-14
Aug-13
Aug-12
Aug-11
Aug-10
Aug-09
Aug-08
-1SD
0.5
Aug-10
0.8x
0.4x
100
Avg.
Aug-09
1.2x
1.0
Aug-08
1.6x
200
Peer Valuations
Banks
Mcap
(Rsbn)
CMP
(Rs)
Rating
AXSB
CUB
DCBB
FB
ICICIBC #
IIB
KMB#
BOB
OBC
SBIN #
UNBK
UJJIVAN
1,411
77
32
109
1,430
698
1,398
346
39
1,889
89
53
591
128
113
64
246
1,174
763
150
114
243
129
452
NEU
BUY
BUY
BUY
BUY
BUY
BUY
BUY
NEU
BUY
NEU
NEU
TP
(Rs)
FY16E
522
212
157
46
115
58
70
42
280
113
1,188
285
761
120
162
72
108
138
265
99
137
91
510
118
ABV (Rs)
P/E (x)
P/ABV (x)
ROAE (%)
ROAA (%)
FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E
225
261 17.2
17.6 14.7 2.79
2.63
2.26 16.8
14.2
15.0 1.67
1.39 1.40
52
60 17.2
15.4 13.1 2.80
2.44
2.12 15.5
15.2
15.7 1.50
1.47 1.47
63
71 16.6
18.7 14.8 1.96
1.80
1.59 11.9
9.5
10.6 1.10
0.81 0.82
44
50 23.0
16.4 12.5 1.53
1.44
1.27
6.0
8.0
9.8 0.55
0.68 0.77
119
136 11.7
10.7
8.7 1.72
1.60
1.35 11.1
10.7
11.6 1.42
1.36 1.41
328
381 30.5
23.7 18.6 4.11
3.58
3.08 16.6
15.9
17.5 1.82
1.88 1.93
136
155 56.6
35.1 27.8 5.40
4.62
3.91 11.0
12.9
14.4 1.41
1.58 1.64
77
116
-6.4
17.0
9.5 2.07
1.94
1.29 -14.4
5.5
9.2 -0.78
0.29 0.47
126
160 25.2
8.7
5.2 0.82
0.90 0.71
1.2
3.3
5.3 0.07
0.19 0.29
108
127 14.1
12.2
8.6 1.81
1.70
1.33
7.9
8.6
10.4 0.46
0.49 0.57
99
152
6.6
6.4
4.0 1.42
1.30
0.85
7.0
6.6
9.8 0.34
0.33 0.48
152
169 25.8
20.3 22.8 3.84
2.97
2.68 18.3
17.5
12.2 3.65
3.65 2.15
Source: Company, HDFC sec Inst Research, # Adjusted for subsidiaries value
Page | 7
Income Statement
(Rs mn)
Balance Sheet
FY14
FY15
FY16E
FY17E
FY18E
(Rs mn)
FY14
FY15
FY16E
FY17E
FY18E
Interest Earned
190,175
199,614
200,587
201,437
214,637
SOURCES OF FUNDS
2,998
2,998
3,462
3,462
3,462
Interest Expended
Share Capital
131,308
134,795
148,950
152,390
158,599
6,513
6,219
15,073
15,073
15,073
134,307
137,793
152,411
155,852
162,061
138,904
148,772
146,841
147,899
155,022
51,271
50,842
53,746
53,538
59,614
Reserves
Other Income
19,453
21,214
17,663
20,057
20,691
Shareholders' Funds
8,649
9,108
9,005
10,017
11,232
Savings
351,606
365,255
398,692
438,561
491,189
Treasury Income
2,478
6,135
4,849
5,750
4,750
Current
118,818
128,395
128,211
137,826
150,231
Total Income
70,724
72,056
71,409
73,595
80,305
29,169
29,785
34,588
36,133
39,160
Total Deposits
Employee Expense
16,767
16,375
20,317
21,418
23,401
Borrowings
78,636
65,450
78,974
84,996
91,484
PPOP
41,555
42,271
36,821
37,462
41,145
Other Liabilities
55,193
61,795
54,882
59,868
65,441
25,751
35,923
33,562
31,428
29,521
Total Liabilities
18,455
23,093
36,070
33,428
31,271
15,804
6,348
3,258
6,034
11,624
4,410
1,377
1,698
1,873
4,115
142,689
107,758
99,624
85,167
58,439
PAT
11,394
Source: Bank, HDFC sec Inst Research
4,971
1,561
4,161
7,510
Investments
614,722
620,387
656,578
694,290
736,953
462,474
518,119
503,283
532,019
565,129
Term Deposit
APPLICATION OF FUNDS
G-Secs
Advances
Fixed Assets
12,556
13,525
22,719
23,514
24,337
Other Assets
42,259
110,852
107,694
98,818
92,424
Total Assets
Page | 8
Key Ratios
FY14
FY15
FY16E
FY17E
FY18E
FY14
FY15
FY16E
FY17E
FY18E
ASSET QUALITY
VALUATION RATIOS
38.0
16.6
4.5
12.0
21.7
56,179
76,662
147,017
168,926
159,571
(16.5)
(56.4)
(72.8)
166.6
80.5
39,044
48,162
99,322
111,949
102,766
BVPS (Rs)
426.2
438.8
396.7
406.7
424.6
4.0
5.3
9.9
10.5
8.8
Adj. BVPS(Rs)
296.0
278.2
138.1
109.4
154.0
2.8
3.3
6.7
6.9
5.7
ROAA (%)
0.54
0.34
0.07
0.17
0.29
30.5
37.2
32.4
33.7
35.6
ROAE (%)
9.2
3.8
1.2
3.0
5.2
1.3
1.6
2.4
2.1
1.7
P/E (x)
3.0
6.9
25.2
9.5
5.2
ROAA TREE
P/ABV (x)
0.38
0.41
0.82
1.04
0.74
2.44%
2.26%
2.30%
2.19%
2.27%
P/PPOP (x)
0.8
0.8
1.1
1.1
1.0
0.92%
0.94%
0.75%
0.82%
0.79%
6.7
2.9
0.6
1.6
3.0
Treasury Income
0.12%
0.27%
0.21%
0.24%
0.18%
Operating Cost
1.39%
1.32%
1.48%
1.48%
1.49%
Provisions
1.22%
1.59%
1.43%
1.28%
1.13%
0.88%
1.02%
1.54%
1.37%
1.19%
EPS(Rs)
PROFITABILITY
Yield on Advances (%)
10.9
10.7
10.1
9.7
9.5
7.2
7.6
7.5
7.3
7.1
7.2
7.2
6.9
6.6
6.5
Tax
0.21%
0.06%
0.07%
0.08%
0.16%
3.7
3.5
3.3
3.2
3.1
ROAA
0.54%
0.22%
0.07%
0.17%
0.29%
NIM (%)
2.6
2.5
2.5
2.4
2.4
Leverage (x)
16.9
17.4
17.4
17.6
18.2
OPERATING EFFICIENCY
ROAE
9.16%
3.83%
1.16%
2.99%
5.22%
1.4
1.3
1.5
1.5
1.5
42.7
45.2
52.0
53.3
51.8
7.9
4.4
2.5
8.5
12.1
10.0
5.4
2.4
6.1
8.5
71.9
71.2
71.3
72.9
75.3
Equity/Assets (%)
6.1
6.0
6.4
6.2
5.9
Equity/Advances (%)
9.7
9.5
10.2
9.6
8.9
CASA (%)
24.3
24.2
25.2
26.0
26.7
11.0
11.4
11.8
11.3
10.8
8.9
8.7
9.1
8.8
8.5
Page | 9
RECOMMENDATION HISTORY
OBC
Date
3-Nov-15
16-Feb-16
12-May-16
8-Jul-16
16-Aug-16
TP
300
250
200
CMP
146
87
85
121
114
Reco
BUY
BUY
BUY
NEU
NEU
Target
235
124
95
112
108
150
100
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
50
Rating Definitions
BUY
: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL
: Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
Page | 10
Disclosure:
We, Parul Gulati, MBA, Darpin Shah, MBA, & Siji Philip, MBA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately
reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or
view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its
Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further
Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest.
Any holding in stock No
Disclaimer:
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arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of
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for, any company mentioned in this mail and/or its attachments.
HDFC Securities and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies)
mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and
other related information and opinions.
HDFC Securities Ltd, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any
action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the
dividend or income, etc.
HDFC Securities Ltd and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report,
or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report.
HDFC Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any
other assignment in the past twelve months.
HDFC Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report
for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or
specific transaction in the normal course of business.
HDFC Securities or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research
report. Accordingly, neither HDFC Securities nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is
not based on any specific merchant banking, investment banking or brokerage service transactions. HDFC Securities may have issued other reports that are inconsistent with and reach
different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served
as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research
Report.HDFC Securities Ltd. is a SEBI Registered Research Analyst having registration no. INH000002475
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