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Emkay
India Equity Research | Banking & Financial Services
March 30, 2015
Sector Update
Banking & Financial Services
©
Your success is our success
Subdued credit growth and high loan
restructuring to mar profits
AXIS Bank
4QFY15 result expectations
CMP
 Led by modest net interest income and high provisioning, we expect our banking universe
564
to see net profit rising 15.1% yoy in 4QFY15. We expect profit to decline 10.1% yoy for
the NBFCs we cover
 Asset-quality trends and loan restructuring would be key monitorables, particularly since
RBI’s forbearance on restructuring ends this quarter
ACCUMULATE
Target Price
590
Bank of Baroda
CMP
REDUCE
Target Price
164
175
 Top picks: HDFC Bank, Axis Bank, IndusInd Bank, Yes Bank, DCB Bank
 Subdued credit growth, modest net interest income. In 4QFY15, banks’ business was
6th,
fairly subdued, with the latest available data (March
2015) showing modest growth in
credit (11.6% yoy) and slower growth in deposits (10.2% yoy). Credit-to-deposits for the
sector was largely flat yoy, and has held at a high 76.3%. We expect banks’ NIMs to have
been steady due to sticky lending yields and prevailing deposit rates in 4QFY15. We
expect NII growth for our banking universe to come at a modest 10.6% yoy (4% qoq).
 Modest fees, likely better Treasury income. Over 4QFY15, both one-year and 10-year
G-Sec yields have fallen by 40bps and 8bps, respectively, to 7.9% and 7.8%. This could
have led to treasury profits for most banks. However, slower business growth is likely to
have led to weak fee income growth for most banks. Also, slower third-party distribution
income could have resulted in slower growth in total non-interest income. Hence, we
expect non-interest income for the banks we cover to have risen 6.1% yoy (9.1% qoq).
 High loan restructuring and provisioning likely. We expect asset-quality issues for the
sector to have continued, given the persistent weak macro-economic environment,
leading to further provisioning for restructured loans and for fresh slippages. As RBI’s
forbearance on restructuring comes to an end this quarter, most banks are likely to end
up restructuring a higher quantum of loans than earlier estimated. Another key
monitorable would be loan recoveries, which have not manifested for most banks in FY15.
 Sector bias towards banks with high capital adequacy and NPA coverage. We prefer
banks that are better placed to manage the near-tern sluggish macro-environment, with
higher tier-1 capital relative to stressed assets and high NPA-coverage. This would offer
protection if asset quality worsens and present a growth opportunity if business growth
improves. While PSU banks may appear cheap, a sharp near-term re-rating is unlikely,
given their low capital adequacy and high share of stressed assets that would make their
book-values appear deceptive. Our top picks are HDFC Bank, Axis Bank, IndusInd Bank,
Yes Bank, DCB Bank.
India large-cap banks’/NBFCs’ Mar '15 quarter forecasts
Company
Axis Bank
Bank of Baroda
Net profit
(Rsm)
22,732
YoY (%)
23.4
QoQ (%)
19.7
NII (Rsm)
37,868
YoY (%)
19.6
QoQ (%)
5.5
13,077
13.0
291.6
32,598
4.3
(0.8)
Bank of India
5,671
1.7
227.1
31,568
3.6
13.5
Canara Bank
5,695
(6.8)
(13.2)
88,597
10.7
2.2
HDFC Bank
28,699
23.4
2.7
60,445
22.0
6.0
ICICI Bank
31,496
18.8
9.0
49,029
12.5
1.9
IndusInd Bank
5,022
26.8
12.3
16,931
21.1
7.5
Punjab National Bk
7,070
(12.3)
(8.7)
42,654
6.6
0.8
State Bank of India
34,990
15.1
20.2
140,761
9.1
2.2
Union Bank
5,294
(8.6)
75.1
23,011
12.1
8.5
Yes Bank
5,606
30.3
3.8
22,225
20.2
7.7
15,628
(9.3)
9.6
22,820
1.0
10.4
180,980
12.3
19.5
568,508
11.2
4.0
HDFC
Large-cap universe
Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.
Bank of India
CMP
REDUCE
Target Price
200
215
Canara Bank
CMP
REDUCE
Target Price
373
407
HDFC Bank
ACCUMULATE
CMP
Target Price
1,037
1,250
ICICI Bank
CMP
ACCUMULATE
Target Price
319
400
Punjab National Bank
CMP
SELL
Target Price
149
155
State Bank of India
CMP
HOLD
Target Price
268
308
Union Bank of India
CMP
REDUCE
Target Price
159
205
Clyton Fernandes
[email protected]
+91 22 66121340
Sohail Halai
[email protected]
+91 22 66121336
Umang Shah
[email protected]
Emkay Global Financial Services Ltd.
Banking & Financial Services
India Equity Research | Sector Update
4QFY15 results preview
Subdued credit growth, modest net interest income
In 4QFY15, banks’ business was fairly subdued, with the latest available data showing modest
growth in credit (11.6% yoy) and slower growth in deposits (10.2% yoy). Credit-to-deposits for
the sector was largely flat yoy, and has held at a high 76.3%.
During the quarter, banks did not decrease their base rates, even as the RBI cut the policy rates
by 50bps and the SLR by 50bps, between 31 Dec’14 and 31 Mar’15. Despite the high credit-todeposits, we expect banks’ NIMs to have been steady due to sticky lending yields and prevailing
deposit rates in 4QFY15. We expect NII growth for our banking universe to come at a modest
10.7% yoy (3.8% qoq).
Exhibit 1: Credit offtake and deposit growth
Rsbn
06-Mar-15
07-Mar-14
% chng
Incremental credit
YTDFY15
4,374
YTDFY14
5,717 Credit
65,243
59,208
10.2
Incremental deposits
6,229
7,663 Deposit
85,540
76,635
11.6
Incr. credit / deposit
70.2
76.3
77.3
(99)
74.6 Credit / Deposit
Source: RBI, Emkay Research
Exhibit 2: Credit growth has remained below deposit growth
(%)
28
24
20
16
12
Deposit
Mar-15
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
8
Credit
Source: RBI, Emkay Research
Sep/14
Mar/14
Sep/13
Mar/13
Sep/12
Mar/12
Sep/11
Mar/11
Sep/10
Mar/10
Mar/15
Sep/14
Mar/14
Sep/13
Mar/13
Sep/12
Mar/12
Sep/11
(%)
32.0
31.5
31.0
30.5
30.0
29.5
29.0
28.5
28.0
Mar/11
(%)
79
78
77
76
75
74
73
72
71
70
Sep/10
Exhibit 4: Investment-deposits has increased despite SLR cut
Mar/10
Exhibit 3: Credit-deposits has remained elevated at 76.3%
Mar/15
Source: RBI, Emkay Research
Source: RBI, Emkay Research
Modest fees, likely better Treasury income
We expect the non-interest income of our banking universe to be modest, primarily driven by low
fee-based income. Treasury profits for most banks are also likely to be modest. Over 4QFY15,
both one-year and 10-year G-Sec yields have fallen 40bps and 8bps, respectively, to 7.9% and
7.8%. This could have led to Treasury profits for most banks.
Slower average loan growth during the quarter should result in comparable growth in fee-based
income. Similarly, third-party distribution income is unlikely to have seen significant traction
during the quarter. We expect non-interest income of our banking universe to have risen 6.1% yoy
(9.1% qoq). In 4QFY15, non-interest income is likely to have comprised 26% of total income (NII +
non-interest income), lower than the 26.8% registered in 4QFY14.
Emkay Research | March 30, 2015
2
Banking & Financial Services
India Equity Research | Sector Update
Exhibit 5: Over 4QFY15, G-Sec yields have decreased
(%)
8.5
8.3
8.1
7.9
7.7
1 Yr
5 Yr
31-Mar
24-Mar
17-Mar
10-Mar
3-Mar
24-Feb
17-Feb
10-Feb
3-Feb
27-Jan
20-Jan
13-Jan
6-Jan
30-Dec
7.5
10 Yr
Source: Bloomberg
High loan restructuring and provisioning likely
Asset-quality trends and loan restructuring would continue to be key monitorables. We expect
asset-quality issues for the sector to have continued, given the persistent weak macroeconomic
environment, leading to further provisioning for restructured loans and for fresh slippages. As
RBI’s forbearance on restructuring coming to an end this quarter, most banks are likely to end
up restructuring a higher quantum of loans than earlier estimated. Another key monitorable would
be loan recoveries, which have not manifested for most banks in FY15.
We expect restructuring of advances worth Rs400-500bn in 4QFY15. While referrals to the CDR
(corporate debt restructuring) cell declined yoy in 9MFY15, restructuring outside CDR remains
high. In 4QFY15, SBI has indicated that Rs55bn of advances are likely to be restructured, with
ICICI Bank likely to restructure ~Rs23bn, higher than that restructured in 3QFY15 (Rs17.6bn).
Axis Bank has not given any restructuring guidance for 4QFY15.
Exhibit 6: Excluding large private banks and SBI, gross NPA (%) has increased for large-cap banks
GNPA %
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
SBI
5.3
4.8
5.6
5.6
5.7
5.0
4.9
4.9
4.9
PNB
4.6
4.3
4.8
5.1
5.0
5.3
5.5
5.7
6.0
BOB
2.4
2.4
3.0
3.2
3.3
2.9
3.1
3.3
3.9
BOI
3.1
3.0
3.0
2.9
2.8
3.2
3.3
3.5
4.1
Canara
2.8
2.6
2.9
2.6
2.8
2.5
2.7
2.9
3.4
Union
3.4
3.0
3.5
3.6
3.9
4.1
4.3
4.7
5.1
Axis
1.1
1.1
1.1
1.2
1.3
1.2
1.3
1.3
1.3
HDFC Bk
1.0
1.0
1.0
1.1
1.0
1.0
1.1
1.1
1.0
ICICI
3.3
3.2
3.2
3.1
3.1
3.0
3.1
3.1
3.4
IndusInd
1.0
1.0
1.1
1.1
1.2
1.1
1.1
1.1
1.1
Yes
0.2
0.2
0.2
0.3
0.4
0.3
0.3
0.4
0.4
Source: Companies, Emkay Research
Exhibit 7: Excluding BOI and Canara Bank, NPA coverage of large-cap banks has steadily declined
NPA coverage %
3QFY13
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
SBI
52.7
57.1
50.7
49.9
45.2
49.5
47.2
45.7
44.4
PNB
45.8
46.3
40.0
41.9
45.3
47.5
46.6
44.0
37.9
BOB
54.1
47.5
44.3
42.0
44.5
49.2
50.2
48.7
46.3
BOI
36.7
32.1
31.9
37.7
38.7
37.5
35.8
35.6
39.7
Canara
15.7
15.7
15.3
13.6
14.9
21.2
24.6
21.8
28.5
Union
50.4
46.9
45.3
42.1
42.5
44.2
43.7
43.7
43.5
Axis
70.2
70.6
68.3
69.3
66.6
67.4
67.8
67.3
67.9
HDFC Bk
79.6
79.9
74.7
73.9
73.6
72.6
70.0
72.7
73.9
ICICI
77.7
76.8
75.4
73.1
70.0
68.6
68.4
65.9
63.5
IndusInd
70.3
70.1
79.9
80.0
73.6
70.4
70.1
70.2
70.0
Yes
79.6
92.6
88.5
85.3
78.4
85.1
78.4
75.8
76.8
Source: Companies, Emkay Research
While RBI has allowed banks to utilize up to 50% of their countercyclical provisioning buffer (up
from 33% earlier) for making specific provisions for non-performing assets, this could be a mild
relief in the face of the large anticipated provisions for restructured loans in 4QFY15. Since rising
bad loans have been a concern for the banking sector, this relaxation may lower the impact on
profitability, albeit to a limited extent.
Emkay Research | March 30, 2015
3
Banking & Financial Services
India Equity Research | Sector Update
The high provisioning for NPAs and restructured loans is likely to have hit earnings growth of
most banks. Private banks are likely to report relatively lower credit costs since their NPA
coverage is higher than public-sector banks, and incremental loan defaults are estimated to be
less than those of public-sector banks.
Profitability likely to remain low, particularly for PSU banks
Led by modest net interest income and high provisioning, we expect our banking universe to see
net profit rising 15.1% yoy (20% qoq) in 4QFY15. We expect profit to decline 10.1% yoy for the
NBFCs we cover. For the large-cap PSU banks in our coverage, we expect weak core preprovisioning profit growth, and RoAs to persist between 0.4% to 0.8%. For the large-cap private
sector banks, we expect robust RoAs to remain robust, between 1.8% to 2%.
Exhibit 8: Weak core pre-provisioning profit growth likely for large-cap PSU banks
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
Axis
35.4
32.5
39.3
17.2
18.3
HDFC Bk
11.5
19.1
28.3
28.5
29.3
ICICI
18.9
14.8
31.3
24.7
19.9
SBI
(21.7)
(20.2)
(14.7)
0.1
BOB
(1.0)
(6.0)
(11.6)
BOI
(1.2)
5.3
16.6
PNB
(6.9)
(2.3)
Union
1QFY15
2QFY15
3QFY15
4QFY15e
9.6
5.3
15.7
24.6
22.9
11.4
17.6
26.6
21.0
15.0
15.1
20.4
35.8
29.1
31.2
13.5
(3.0)
(2.4)
31.5
10.4
10.8
1.2
(3.5)
14.0
(0.2)
9.7
(2.9)
(23.4)
(3.9)
0.3
2.7
15.5
10.7
10.8
(5.2)
(21.3)
(1.5)
(3.2)
(5.7)
(4.4)
(14.7)
3.9
11.4
1.8
19.3
Canara
3.6
12.3
12.3
19.6
25.1
17.2
9.2
(1.2)
(11.1)
IndusInd
49.5
51.6
41.6
30.7
21.4
22.8
19.9
15.4
16.0
Yes
55.5
38.6
21.8
3.8
11.4
18.0
33.8
40.2
33.4
Source: Company, Emkay Research
Exhibit 9: Robust RoA for large-cap private banks likely to persist
4QFY13
1QFY14
2QFY14
3QFY14
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15e
Axis
1.9
1.7
1.6
1.8
2.0
1.7
1.7
1.9
2.1
HDFC Bk
1.9
1.8
1.9
2.1
1.9
1.8
1.9
2.1
2.0
ICICI
1.7
1.7
1.7
1.8
1.8
1.8
1.8
1.9
2.0
SBI
0.9
0.8
0.6
0.5
0.7
0.7
0.7
0.6
0.7
BOB
0.8
0.9
0.8
0.7
0.7
0.8
0.7
0.2
0.8
BOI
0.7
0.8
0.5
0.4
0.4
0.6
0.5
0.1
0.4
PNB
1.0
1.1
0.4
0.6
0.6
1.0
0.4
0.5
0.5
Union
1.1
0.7
0.3
0.4
0.7
0.7
0.4
0.3
0.6
Canara
1.3
1.3
0.9
0.6
0.8
1.1
0.8
0.8
0.8
IndusInd
1.7
1.8
1.7
1.7
1.9
1.9
1.9
1.9
1.9
Yes
1.6
1.6
1.5
1.6
1.6
1.6
1.7
1.8
1.8
Source: Emkay Research, Company
Emkay Research | March 30, 2015
4
Banking & Financial Services
India Equity Research | Sector Update
Exhibit 10: Banks / NBFCs Mar’15 quarter forecasts
Company
Bloomberg
code
NII (Rsm)
YoY (%)
QoQ (%)
PPP (Rsm)
YoY (%)
QoQ (%)
PAT (Rsm)
YoY (%)
QoQ (%)
Axis
AXSB IN
37,868
19.6
5.5
39,156
20.6
18.1
22,732
23.4
19.7
HDFC Bank
HDFCB IN
60,445
22.0
6.0
48,080
27.2
0.6
28,699
23.4
2.7
ICICI
ICICIBC IN
49,029
12.5
1.9
52,974
19.0
5.2
31,496
18.8
9.0
IndusInd
IIB IN
16,931
21.1
7.5
8,397
16.8
8.5
5,022
26.8
12.3
Yes
YES IN
22,225
20.2
7.7
9,303
36.7
7.8
5,606
30.3
3.8
Federal
FB IN
13,554
11.7
5.6
4,105
(2.3)
3.3
2,559
(7.7)
(3.3)
South Indian
SIB IN
10,640
13.4
7.8
2,490
21.5
13.4
1,196
(4.0)
35.9
DCB
DCBB IN
6.3
Private Banks
1,281
28.0
5.1
660
31.6
(3.4)
452
15.6
211,974
17.9
5.3
165,166
21.8
6.9
97,762
20.9
9.0
4.3
(0.8)
26,264
1.8
12.3
13,077
13.0
291.6
BOB
BOB IN
32,598
BOI
BOI IN
31,568
3.6
13.5
20,309
1.7
8.9
5,671
1.7
227.1
Canara
CBK IN
88,597
10.7
2.2
18,804
(0.1)
4.6
5,695
(6.8)
(13.2)
PNB
PNB IN
42,654
6.6
0.8
25,149
(20.8)
(8.6)
7,070
(12.3)
(8.7)
SBI
SBIN IN
140,761
9.1
2.2
104,594
(1.6)
12.5
34,990
15.1
20.2
Union
UNBK IN
23,011
12.1
8.5
16,242
23.1
10.8
5,294
(8.6)
75.1
Allahabad
ALBK IN
34,494
(0.3)
3.5
11,334
35.7
5.5
2,451
55.3
49.3
Corporation
CRPBK IN
39,748
6.4
3.2
7,552
18.6
3.9
1,083
160.6
(26.4)
433,432
7.5
3.1
230,248
(0.1)
8.0
75,332
8.4
37.9
20.0
PSU Banks
Banks Universe
645,405
10.7
3.8
395,413
8.0
7.6
173,094
15.1
HDFC
HDFC IN
22,820
1.0
10.4
24,783
4.0
17.5
15,628
(9.3)
9.6
M&M Fin Services
MMFS IN
7,542
26.2
16.4
5,519
1.5
15.7
1,976
(36.4)
44.9
LIC Housing
Finance
LICHF IN
21,517
14.8
1.5
5,913
18.4
11.9
4,001
8.1
16.2
51,878
9.6
7.3
36,215
5.7
16.3
21,605
(10.1)
13.3
697,284
10.6
4.0
431,629
7.8
8.2
194,698
11.6
19.2
NBFCs
Financial Services coverage
universe
Source: Company, Emkay Research
Emkay Research | March 30, 2015
5
Banking & Financial Services
India Equity Research | Sector Update
Valuations and risks
We see little scope for significant valuation upsides in banking stocks. Slower-than-past business
growth, limited scope for margin expansion and the likelihood of restructured loans defaulting
could keep valuations modest. The key risk to our call is a sharp spurt in economic growth, more
than estimated.
Within the banking sector, we prefer banks that:


Are better placed to manage NPAs arising due to the sluggish macro-environment, with
high NPA-coverage ratios and a lower proportion of restructured assets
Have higher tier-1 capital relative to stressed assets. This would offer protection if asset
quality worsens and present a growth opportunity if business growth improves
HDFC Bank, ICICI Bank and Yes Bank are our top picks in our banks coverage universe
Key risks to our call


Emkay Research | March 30, 2015
Faster-than-expected growth rate of the Indian economy. Our economist estimates India’s
GDP to grow 5-6% over FY16-17. Any upside to this growth forecast would mean morethan-estimated demand for bank credit.
Less-than-expected rise in restructured-loan defaults. A less-than-expected increase in
restructured-loan defaults could boost banks’ earnings in FY16-17 as provisioning for bad
loans would decrease.
6
Banking & Financial Services
India Equity Research | Sector Update
Exhibit 11: Valuation matrix – BFSI coverage universe
Bloomberg code
Bank
HDFC
ICICIBC
PNB
SBIN
CMP
Target
Upside (Downside)
Recommendation
FY15-17 EPS CAGR
P/ABV (x)
Rs
Rs
%
1,263
546
161
199
363
1,015
315
1,385
590
175
215
409
1,250
400
9.7
8.0
8.7
8.3
12.7
23.2
27.2
Hold Accumulate Reduce Reduce Reduce Accumulate Accumulate
14.0
19.4
17.6
20.2
26.1
22.5
13.7
3.7
3.0
1.2
0.7
0.9
4.2
2.3
3.4
2.6
1.1
0.7
0.8
3.6
2.0
3.1
2.2
0.9
0.6
0.7
3.1
1.8
3.6
2.9
0.9
0.5
0.7
4.1
1.9
3.3
2.5
0.8
0.4
0.6
3.6
1.7
3.0
2.2
0.7
0.4
0.5
3.1
1.5
3.4
2.4
1.0
0.7
0.8
3.8
2.4
3.3
2.3
0.8
0.4
0.6
3.8
2.0
35.0
17.3
8.4
5.5
6.5
24.5
16.1
30.9
14.8
7.1
4.6
5.2
19.8
14.2
26.9
12.1
6.1
3.8
4.1
16.3
12.4
19.5
18.0
10.9
7.5
10.6
19.7
14.7
20.5
18.3
11.9
8.3
12.0
19.4
15.0
21.6
19.2
12.6
9.4
13.8
20.3
15.5
2.5
1.8
0.6
0.4
0.5
1.9
1.8
2.5
1.8
0.7
0.4
0.6
2.0
1.9
2.6
1.9
0.7
0.4
0.6
2.0
1.8
36.1
31.6
19.1
36.3
56.0
41.4
19.6
40.9
37.0
22.7
42.9
69.7
51.3
22.1
47.0
45.0
26.4
52.4
88.9
62.1
25.3
56.9
74.5
41.1
23.3
26.6
102.8
114.0
65.1
87.8
48.9
27.6
33.1
128.2
129.3
75.5
107.3
56.8
33.7
42.3
156.3
148.4
17.5
4.8
3.9
4.3
13.9
8.0
5.3
1.4
0.9
2.4
2.2
3.8
0.8
1.7
0.7
1.4
4.0
4.3
3.6
1.0
3.8
0.7
1.5
3.9
4.4
3.8
0.9
3.6
0.7
1.3
3.6
4.0
3.4
0.8
3.3
194
188
177
438
556
246
140
209
217
195
475
609
284
154
230
253
215
521
677
330
172
187
183
138
267
383
242
132
201
212
152
278
431
280
146
222
247
170
311
512
326
163
147
155
5.6
Sell
23.7
1.2
1.1
0.9
0.7
0.6
0.6
1.0
0.6
7.7
7.2
5.0
9.2
9.0
11.8
0.6
0.6
0.7
19.1
20.5
29.2
34.6
37.1
52.9
2.1
1.4
6.4
6.3
5.6
210
228
254
126
131
155
264
160
816
308
205
850
16.8
28.3
4.2
Hold Reduce Accumulate
23.3
13.0
22.1
1.4
0.8
2.9
1.2
0.7
2.5
1.1
0.6
2.2
1.0
0.6
2.9
0.9
0.5
2.5
0.8
0.5
2.1
1.3
0.8
2.2
1.0
0.6
2.2
15.3
5.6
16.8
11.9
5.7
13.8
10.1
4.4
11.3
10.4
9.5
21.4
12.3
8.7
19.3
13.2
10.9
20.2
0.7
0.5
1.7
0.8
0.4
1.7
0.8
0.5
1.7
17.2
28.5
48.5
22.2
28.3
58.9
26.2
36.4
72.3
128.6
18.1
20.1
165.6
18.0
24.4
195.4
23.0
30.0
3.5
4.3
12.0
1.3
2.7
1.5
5.1
5.3
0.4
4.8
4.6
0.4
4.5
3.9
0.4
169
289
282
186
313
329
206
341
387
124
197
277
139
223
322
158
253
378
P/BV (x)
Target P/ABV (x)
Target P/BV (x)
P/E (x)
RoE%
RoA %
EPS Rs
PAT Rsbn
DPS Rs
Dividend Yield %
Gross NPAs %
BV Rs
ABV Rs
%
FY15
FY16
FY17
FY15
FY16
FY17
FY17
FY17
FY15
FY16
FY17
FY15
FY16
FY17
FY15
FY16
FY17
FY15
FY16
FY17
FY15
FY16
FY17
FY15
FY15
FY15
FY16
FY17
FY15
FY16
FY17
FY15
FY16
FY17
AXSB
BOB
BOI
CBK
HDFCB
UNBK
YES
IIB
FB
ALBK CRPBK
881
132
98
53
867
168
105
58
(1.6)
27.6
7.0
10.8
Hold Accumulate Reduce Reduce
23.9
16.8
32.5
35.9
4.7
1.5
0.9
0.8
4.0
1.4
0.8
0.8
3.3
1.2
0.7
0.7
4.6
1.5
0.5
0.4
3.9
1.3
0.4
0.4
3.3
1.2
0.4
0.4
3.3
1.5
0.8
0.7
3.2
1.5
0.4
0.4
25.7
11.5
8.1
6.8
20.9
10.2
5.4
5.1
16.8
8.4
4.6
3.7
19.2
13.4
5.9
6.3
20.1
13.6
8.3
7.9
21.1
14.8
9.1
10.2
1.9
1.2
0.3
0.3
1.9
1.2
0.4
0.4
1.9
1.2
0.4
0.4
34.3
11.5
12.2
7.7
42.2
12.9
18.2
10.3
52.6
15.6
21.4
14.3
18.0
9.8
6.6
6.5
22.2
11.0
9.9
8.6
27.6
13.4
11.7
12.0
6.3
2.6
2.7
1.9
0.7
2.0
2.8
3.5
1.1
2.2
5.4
5.1
1.1
2.1
5.3
5.3
1.2
2.0
4.9
5.0
193
90
211
126
228
100
226
135
271
112
244
146
188
87
107
65
223
97
117
67
264
108
131
80
SIB DCBB
24
30
21.7
Hold
25.5
1.1
0.9
0.8
0.9
0.8
0.7
1.0
0.9
8.0
6.2
5.1
12.1
14.2
15.4
0.7
0.9
0.9
3.1
4.0
4.8
4.1
5.3
6.5
0.8
3.2
1.9
1.8
1.8
26
29
33
23
26
30
MMFS LICHF
107
255
140
253
30.5
(0.8)
Buy Reduce
29.5
31.7
2.0
3.0
1.8
2.6
1.6
2.2
2.0
2.6
1.8
2.3
1.5
2.0
2.0
2.2
2.0
2.0
17.4
20.6
15.8
15.7
10.4
11.9
12.7
14.2
11.5
15.5
15.3
18.0
1.2
2.1
1.1
2.4
1.3
2.7
6.2
12.4
6.8
16.3
10.4
21.4
1.7
7.0
1.9
9.2
2.9
12.1
4.0
1.6
1.7
7.1
1.5
6.8
1.3
6.4
54
99
61
111
71
126
53
86
59
100
69
117
430
463
7.6
Hold
21.4
2.6
2.3
1.9
2.5
2.2
1.9
2.1
2.0
15.4
12.5
10.5
17.4
18.5
19.1
1.4
1.5
1.5
27.9
34.3
41.1
14.1
17.3
20.7
6.0
1.4
0.7
0.7
0.7
171
199
231
165
191
222
Source: Bloomberg, Emkay Research (Note: Prices as of March 27, 2014)
Emkay Research | March 30, 2015
7
Banking & Financial Services
India Equity Research | Sector Update
Emkay Rating Distribution
BUY
ACCUMULATE
HOLD
REDUCE
SELL
Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next 12-18 months.
Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next 12-18 months.
Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next 12-18 months.
Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next 12-18 months.
The stock is believed to underperform the broad market indices or its related universe within the next 12-18 months.
Emkay Global Financial Services Ltd.
CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com
DISCLAIMERS AND DISCLOSURES-:
Emkay Global Financial Services Limited (CIN- L67120MH1995PLC084899) and its affiliates are a full-service, brokerage, investment banking,
investment management, and financing group. Emkay Global Financial Services Limited (EGFSL) along with its affiliates are participants in virtually all securities trading markets in India. EGFSL was
established in 1995 and is one of India's leading brokerage and distribution house. EGFSL is a corporate trading member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India
Limited (NSE), MCX Stock Exchange Limited (MCX-SX). EGFSL along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the businesses including stock
broking (Institutional and retail), merchant banking, commodity broking, depository participant, portfolio management, insurance broking and services rendered in connection with d istribution of primary
market issues and financial products like mutual funds, fixed deposits. Details of associates are available on our website i.e. www.emkayglobal.com
EGFSL is under the process of seeking registration under SEBI (Research Analysts) Regulations, 2014. EGFSL hereby declares that it has not defaulted with any stock exchange nor its activities were
suspended by any stock exchange with whom it is registered in last five years, except that NSE had disabled EGFSL from trading on October 05, October 08 and October 09, 2012 for a manifest error
resulting into a bonafide erroneous trade on October 05, 2012. However, SEBI and Stock Exchanges have conducted the routine inspection and based on their observations have issued advice letters or
levied minor penalty on EGFSL for certain operational deviations in ordinary/routine course of business. EGFSL has not been debarred from doing business by any Stock Exchange / SEBI or any other
authorities; nor has its certificate of registration been cancelled by SEBI at any point of time.
EGFSL offers research services to clients as well as prospects. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject
company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
Other disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject
company(s) covered in this report-:
EGFSL or its associates may have financial interest in the subject company.
Research Analyst or his/her relative’s financial interest in the subject company. (NO)
EGFSL or its associates and Research Analyst or his/her relative’s does not have any material conflict of interest in the subject company. The research Analyst or research entity (EGFSL) have not been
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Report: (NO)
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Emkay Research | March 30, 2015
www.emkayglobal.com
8