will government's massive surge in investment ... - Myiris.com

Apr-Jun 2013 Earnings Preview
Bank of India
Rating
Accumulate
Price (Rs) 226
Target Price (Rs) 260
M/Cap (Rs bn) 134.6
Shares o/s (m) 596.6
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
NII 90,240 104,092 117,051
PPP 74,585 84,741 90,516
NIM (%) 2.2 2.2 2.2
PAT 27,493 32,605 38,252
EPS (Rs) 46.1 54.6 64.1
Growth (%) (1.1) 18.6 17.3
PE (x) 4.9 4.1 3.5
P / ABV (x) 0.7 0.6 0.5
We expect PAT contraction of 24.8% YoY. We expect NIMs to stabilize at a low base
of 2.4% reported in Q4FY13. Slippages had inched up marginally to 2.4% in Q4FY13
and we expect similar trend in Q1FY14, leading to credit costs of 130bps driven by
lower write-offs.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
NII 24,996 20,436 22.3 24,760 104,092 90,240 15.3
PPP 20,390 16,736 21.8 20,751 84,741 74,585 13.6
NIM Calculated (%) 2.2 2.1 8 bps 2.3 2.2 2.2 1 bps
PAT 6,670 8,875 (24.8) 7,566 32,605 27,493 18.6
Operating Metrics
Credit Cos t 1.30 0.98 32 bps 1.77 1.32 1.63 (31)bps
Advances 3,002,723 2,641,654 13.7 2,893,675 3,081,764 2,691,004 14.5
Gross NPA 95,720 67,518 41.8 87,653 116,871 87,653 33.3
Net NPA 65,396 44,134 48.2 59,473 67,785 59,473 14.0
Federal Bank
Rating
BUY
Price (Rs) 397
Target Price (Rs) 530
M/Cap (Rs bn) 67.9
Shares o/s (m) 171.1
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
NII 19,747 24,630 29,150
PPP 14,596 17,537 21,390
NIM (%) 3.0 3.1 3.0
PAT 8,382 9,516 11,544
EPS (Rs) 49.0 55.6 67.5
Growth (%) 7.9 13.5 21.3
PE (x) 8.1 7.1 5.9
P / ABV (x) 1.1 1.0 0.9
We expect PPOP growth to inch up as margins recover from 4Q levels but we had
pushed out our expectation on likely improvement in Cost/Income ratio to FY14 on
on likely provisioning on wage hike/pensions. Loan growth is expected to remain
weak but we expect a improvement in large corporate slippages v/s 4Q13 levels.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
NII 5,531 4,916 12.5 4,798 24,630 19,747 24.7
PPP 4,130 3,465 19.2 3,695 17,537 14,596 20.2
NIM Calculated (%) 3.2 3.3 (3)bps 2.9 3.1 3.0 3 bps
PAT 2,173 1,904 14.2 2,219 9,516 8,382 13.5
Operating Metrics
Credit Cost 0.80 0.66 14 bps 0.89 0.72 0.74 (2)bps
Advances 443,172 380,429 16.5 440,967 489,473 409,263 19.6
Gross NPA 16,140 14,089 14.6 15,540 18,705 15,540 20.4
Net NPA 4,255 2,362 80.2 4,319 5,199 4,319 20.4
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