bank q3 Result Anlysis and Trading Idea

REPORT INSIDE •

FINANCIAL RESULT ANALYSIS

•

TRADING IDEA

WWW.S WWW. SH ARE AREP PATI ATI.COM .COM January 10, 2012

Anal Anal yst yst : Lok Lokeesh Kuma K umarr

T RADI RADING NG SOL OLUT UTIO IO NS

WWW.S WWW. SH ARE AREP PATI ATI.COM .COM

RES RE SEARCH RE REP PO RTS

INDUSINDBANK Q3 RESUL RESULT T ANLYSI SIS S AND TRADI DIN NG IDEA IDEA January 10, 2012 Flat performances w ith confidence

2 1 0 2 / 0 1 / 1 | A E D I G N I D A R T D N A S I S Y L N A T L U S E R 3 Q K N A B D N I S U D N I

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PERFORMANE

SHAREPATI VIEW

COMPARING WITH MARKET EXPECTATION

OVERALL RESULT

FLAT POSITIVE

AT PAR

FLAT

FLAT

GOOD

FLAT

PROFITS SALES

Trading Idea Recommendation

BU Y

Recommendation date 10-01-2012 Current market price

27 0

First Target

30 0

Final Target

350-400

Downside/Upside

10 - 20%

Time frame

2-3 MONTHS




SH ARE AREP PATI.COM ATI .COM ANALYSI S

past six month’ s credit and liqui l iquidit dit y sit sit ua uatt ion, today’s IndusInd IndusInd bank bank res r esult ult s ar e sa sat isfac isfactor tor y in i n natur natur e.  Keeping in view of past

 The bank posted a flat growth on and average of 5-6% in all aspects on QOQ basis which is slightly below than our expectation. We expected a 15% of growth. 2 1 0 2 / 0 1 / 1 | A E D I G N I D A R T D N A S I S Y L N A T L U S E R 3 Q K N A B D N I S U D N I

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hass register registered ed a growt grow t h of Rs 1654.86 1654.86 crore cror e in total t otal income i ncome when compa comparr ed to 1563.07 1563. 07 crore cror e on QOQ QO Q bas basis and and  It ha 1110.86 crore on YOY basis – is flat positive growth

 Employee cost and other operational expensesup by 9% and 5% on QO Q O Q bas basi s and 29% 29 % and and 30% 30 % on YO Y basi basi s which is in line l ine wit h eexpec xpectation. tation. – is i s OK nterestt cost cost up by 6% on QOQ Q OQ and 74% on YOY YO Y bas basis is conce concerr n which w hich is going to come comedown down i n H2 H 2 of 2012.  I nteres

 Tax expenses up by 8% on qoq basis and 24% on YOY basis is showing it sound business environment. pr ofitt up by 205.96 crore cror e when compa compared red 193 cror e on QOQ QO Q bas basis is fla fl at, and 34% on YOY YO Y bas basis.  ItItss net profi

 Capital Adequacy ratio is dip by 6% on QOQ basis and 14% on YOY basis is area of concern and is unexpected. are in flat move mode up by 7% on QOQ basis and 33% YOY basis is good sign.  Earnings per share arein

 Gross and Net NPA is shrunk by 6% on QOQ basis and 16% YOY basis is a positive sign which shows its management ability of handling asset portfolio and industry NPA moving northwards.




 Return on asset: there was a nil growth on QOQ basis and it is satisfactory that it has not shown any negative growth.  Ne Nett I nterest I ncome ncomeis is under pressure which is dip by 6% on QOQ basis and 22% on YOY basis is quite concern.

 Ne Nett Profit M argin is flflaat . It is quite quit e disa disappoint ing to t o see see a -10% compar compar ed in Q3 of o f 22010 010 a yea year ba back. ck.  Total segme egment nt revenue has shown a flat growth as we mentioned above up only by 6% on QOQ basis and 52% on YOY basis. 2 1 0 2 / 0 1 / 1 | A E D I G N I D A R T D N A S I S Y L N A T L U S E R 3 Q K N A B D N I S U D N I

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 Consumer finance banking and retail banking growth quite impressive.  Book value per share stood at 94.55  Management view of positive business growth forecasting is positive.  Branch Branch expans expansion ion has has increa incr eassed to t o 365, t his is cer cer t ainl y wil w illl add reve r evenue nue to it s wallet. wall et.  We are in view that as an investor one can buy a stock for the target of Rs 290 from 1 month perception.




Unaudited Financial Results for the quarter ended December 31, 2011 (Rs. in crores)

Quarter ended ended

2 1 0 2 / 0 1 (a) / 1 | (b) A E D (c) I G N I D A R (d) T D N A S I S Y L N A T L U S E (i) R 3 Q (ii) K N A B D N I S U D N I

4

1

Interest Earned

ended

Change

31-12-2011

30-09-2011

31-12-2010

31-12-2011

31-12-2010

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

QOQ

YOY

1,389.74

1,323.86

914.91

3,878.18

2,540.52

5%

52%

1,082.69

1,037.10

723.08

3,020.48

2,004.90

4%

50%

293.58

267.22

187.43 187.43

808.18

527.07

10%

57%

3.45

4.45

4.33

12.14

7.16

-22%

-20%

10.02

15.09

0.07

37.38

1.39

-34%

14214%

265.12

239.21

195.95

719.73

532.03

11%

35%

1,654.86

1,563.07

1,110.86

4,597.91

3,072.55

6%

49%

(a)+(b)+(c)+(d) Interest/discount on advances/bills Income on Investments Interest on balances with Reserve Bank of India and other inter banks funds Others 2

Other Income

3

TOTAL INCOME (1+2)

4

Interest Expended

959.09

904.67

551.91

2,638.33

1,552.11

6%

74%

5

Operating Expenses (i)+(ii)

346.53

325.42

267.77

965.64

736.80

6%

29%

Employees Cost

126.12

115.22

97.95

352.05

282.43

9%

29%

Other Operating Expenses

220.41

210.20

169.82

613.59

454.37

5%

30%

1,305.62

1,230.09

819.68

3,603.97

2,288.91

6%

59%

TOTAL EXPENDITURE EXCLUDING PROVISIONS 6

AND CONTINGENCIES (4+5) OPERATING PROFIT BEFORE PROVISION AND



7

CONTINGENCIES (3-6)

8

Provisions (other than tax) and Contingencies

9

Exceptional items

10


5


349.24

332.98

291.18

993.94

783.64

5%

20%

42.83

46.97

56.19

134.39

161.64

-9%

-24%

-

-

-

-

-

Profit(+) / Loss(-) from ordinary Activities before T ax

11

Tax Expense

12

Net Profit(+) / Loss(-) from ordinary Activities Activities after Tax (10-11)

306.41

286.01

234.99

859.55

622.00

7%

30%

100.45

92.92

81.13

280.32

216.44

8%

24%

205.96

193.09

153.86

579.23

405.56

7%

34%




Balance Sheet (Rs crs)

Q3FY12

Q3FY11

Y-o-Y (%)

Q2FY12

Q-o-Q (%)

Capital

467

465

0%



467

0%



Reserves and Surplus

4,168

3,517

19%



3,962

5%



Deposits

40,558

30,663

32%



38,367

6%



Borrowings

8,137

4,981

63%



5,985

36%



Other Liabilities and Provisions

1,803

1,874

-4%



1,675

8%



Total

55,133

41,500

33%



50,456

9%



Cash and Balances with RBI

2,960

2,213

34%



3,216

-8%



Balances with Banks

876

557

57%



619

42%



Investments

15,362

11,868

29%



14,286

8%



Advances

32,426

25,001

30%



30,135

8%



Fixed Assets

635

589

8%



624

2%



Other Assets

2,874

1,272

126%



1,576

82%



Total

55,133

41,500

33%



50,456

9%



Business (Advances + Deposit)

72,984

55,664

31%



68,519

7%



Capital & Liabilities


6

Assets



7

Sli ght dip in NI NIM M

Cost to income ratio quite higher


Neutr al growt h in Return on asset

NPAs are encouraging


Retur Re turnn on equity improved i mproved

Revenue generation per Employee at par



8

Current account negative growth



Savingsbank account positive positi ve growth growt h

Overall performance of IndusInd Bank is flat positive, in long term basis we expect this stock will test the range of 350-375, i.e. three month perceptive. We recommend this stock as buy at every decline. - By

Sharepati team.




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bank q3 Result Anlysis and Trading Idea

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