IndusInd Bank-2QFY14 Result Update - 15 October 2013 Longtermgrp++ NB
IndusInd Bank-2QFY14 Result Update - 15 October 2013 Longtermgrp++ NB
IndusInd Bank-2QFY14 Result Update - 15 October 2013 Longtermgrp++ NB
IndusInd Bank
15 October 2013 Reuters: INBK.BO; Bloomberg: IIB IN
HOLD
Sector: Banking CMP: Rs428 Target Price: Rs445 Upside: 4% Hemindra Hazari [email protected] +91-22-3926 8017 Manuj Oberoi [email protected] +91-22-3926 8114
Key Data Current Shares O/S (mn) Mkt Cap (Rsbn/US$bn) 52 Wk H / L (Rs) Daily Vol. (3M NSE Avg.) Price Performance (%) 1M IndusInd Bank Nifty Index Source: Bloomberg 6.8 4.5 6M 6.7 10.6 1 Yr 16.9 7.7 524.2 224.1/3.6 532/312 3,754,565
QoQ (%) 6.6 (0.5) 26.1 5.6 7.0 3.0 (11.4) (2.9) 4.3 3.8 (8.4) (3.4) (32.7) (16.0) (1.4) -
1HFY13 26,940 6,267 347 33,599 (23,661) 9,938 6,393 16,331 (3,147) (4,946) 8,238 (2,348) (1,025) (3,373) 4,866 9.3
1HFY14 31,229 7,328 747 39,308 (25,514) 13,794 8,873 22,668 (3,956) (6,417) 12,295 (3,435) (2,209) (5,645) 6,651 12.7
YoY (%) 15.9 16.9 115.4 17.0 7.8 38.8 38.8 38.8 25.7 29.7 49.2 46.3 115.5 67.4 36.7 -
Institutional Equities
Exhibit 1: Financial summary
Y/E March (Rsmn) Total income Profit before provisions NIM (%) Net profit EPS (Rs) EPS growth (%) PE (x) Price/book value (x) Price/adjusted book value (x) Dividend yield (%) Cost-to-income (%) RoA (%) RoE (%) Tier-1 capital (%) FY11 20,902 10,817 3.6 5,773 12.4 45.2 34.5 5.2 5.4 0.5 48.2 1.4 17.9 12.3 FY12 27,160 13,730 3.4 8,026 17.2 38.5 24.9 4.5 4.7 0.5 49.4 1.6 18.4 11.2 FY13 35,958 18,395 3.5 10,612 20.3 18.3 21.1 3.0 3.2 0.7 48.8 1.6 17.4 13.8 FY14E 45,357 22,779 3.4 12,651 24.2 19.2 17.7 2.7 2.8 0.8 49.8 1.6 15.7 13.4 FY15E 55,969 27,483 3.5 15,823 30.3 25.1 14.1 2.3 2.4 0.8 50.9 1.6 17.1 12.7
IndusInd Bank
Institutional Equities
Conference call takeaways
Cost of borrowings and deposits went up during the quarter. While the management did well in containing the decline in margins at 3.65%, recourse to refinancing close to Rs30bn (blended cost at 7.0% with no SLR or Statutory Liquidity Ratio requirement) and foreign currency borrowings (blended cost at 7.5%) came in handy. The bank expects to make the optimum use of alternate channels, with least exposure to the MSF or Marginal Standing Facility window going forward. Cost of deposits was flat in 2QFY14, largely on account of traction in savings accounts and lower re-pricing of deposits. Trading profit stood at Rs242mn compared to Rs1,045mn in 1QFY13 as the bank sold close to 50% of its G-secs, while the remaining has been provided for. The bank reported deposit growth of 11.1% YoY and a decline of 4.7% QoQ. The sequential decline has been attributed to the funding mix. The bank expects to bring down its cost-to-income ratio to 45.0% from 47.4% currently. The bank expects to open 625 branches by the end of FY14. Corporate bond book of the bank stood at Rs8,000mn. Mark-to-market losses have been equally divided into seven quarters. The management has given guidance on keeping the banks core fee income growth intact over loan book growth going forward. Wholesale deposits to total funding ratio stood at 35%-36%, while the ratio of wholesale deposits to total deposits stood at 45%. The bank has sold loans close to Rs16bn in 2QFY14 compared to Rs20bn in 1QFY14. The banks investment banking revenue, up 101% YoY and 32% QoQ at Rs658mn, is completely on the debt side. The bank has sold close to Rs250mn of its loans to an ARC (asset reconstruction company). Currently, it holds close to Rs850mn of security receipts.
Rating track
Date 21 August 2012 4 October 2012 11 October 2012 4 December 2012 7 January 2013 9 April 2013 22 April 2013 7 October 2013 14 October 2013 Rating Buy Hold Hold Buy Buy Buy Hold Hold Hold Market price (Rs) 333 370 358 421 431 395 450 396 428 Target price (Rs) 383 383 383 510 510 510 510 450 445
IndusInd Bank
Institutional Equities
Disclaimer
Stock Ratings Absolute Returns
BUY > 15% HOLD 0-15% SELL < 0%
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Team Details:
Name Rahul Arora Hemindra Hazari Sales and Dealing: Neha Grover Ravi Jagtiani Pradeep Kasat Michael Pillai Umesh Bharadia AVP Sales Dealing Desk Dealing Desk Dealing Desk Dealing Desk [email protected] [email protected] [email protected] [email protected] [email protected] +91 22 3926 8093 +91 22 3926 8230, +91 22 6636 8833 +91 22 3926 8100/8101, +91 22 6636 8831 +91 22 3926 8102/8103, +91 22 6636 8830 +91-22-39268226 CEO Head of Research Email Id [email protected] [email protected] Direct Line +91 22 3926 8098 / 99
+91 22 3926 8017 / 18
IndusInd Bank