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Apr-Jun 2013 Earnings Preview
Jammu & Kashmir Bank
Rating
BUY
Price (Rs) 1,220
Target Price (Rs) 1,600
M/Cap (Rs bn) 59.1
Shares o/s (m) 48.5
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
NII 23,160 25,551 28,959
PPP 18,108 18,404 20,202
NIM (%) 3.5 3.3 3.2
PAT 10,551 10,101 11,336
EPS (Rs) 217.6 208.3 233.8
Growth (%) 31.4 (4.3) 12.2
PE (x) 5.6 5.9 5.2
P / ABV (x) 1.2 1.1 0.9
We expect PAT growth of 13% y/y . Loan growth is expected at 1.0% QoQ, first
quarter being a seasonally low quarter but J&K growth contniues remain robust.
Further, we build in a bit higher credit cost at 70bps, up ~10bps YoY but mgt
commentary has been sanguine and we expect a better asset quality trends that
reported in 4Q13 though restructuring will remain elevated.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
NII 6,450 5,356 20.4 6,336 25,551 23,160 10.3
PPP 4,768 4,152 14.9 5,381 18,404 18,108 1.6
NIM Calculated (%) 4.0 3.9 1 bps 4.1 3.3 3.5 (6)bps
PAT 2,774 2,461 12.7 2,501 10,101 10,551 (4.3)
Operating Metrics
Credit Cost 0.70 0.61 9 bps 1.91 0.77 0.56 21 bps
Advances 395,924 332,253 19.2 392,004 429,244 361,389 18.8
Gross NPA 7,081 5,410 30.9 6,438 8,825 6,438 37.1
Net NPA 608 482 26.2 553 758 553 37.1
Kotak Mahindra Bank
Rating
Reduce
Price (Rs) 692
Target Price (Rs) 700
M/Cap (Rs bn) 530.7
Shares o/s (m) 766.6
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
NII 41,689 50,904 62,788
PPP 31,651 38,173 47,455
NIM (%) 4.5 4.5 4.5
PAT 19,995 23,457 29,548
EPS (Rs) 26.8 30.6 38.5
Growth (%) 15.3 14.3 26.0
PE (x) 25.8 22.6 18.0
P / ABV (x) 3.5 3.0 2.6
We expect PAT growth of 35% YoY. NIMs is likely to remain robust as capital issue
and large fixed rate book will aid margins. Fee income jumped in Q4FY13 and
sustainability of that will be the key to watch out for. We factor in credit costs of
~50bps similar to credit costs reported in Q4FY13.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
NII 8,957 7,213 24.2 9,034 50,904 41,689 22.1
PPP 6,236 4,484 39.1 6,534 38,173 31,651 20.6
NIM Calculated (%) 4.5 4.6 (3)bps 4.7 4.5 4.5 0 bps
PAT 3,815 2,824 35.1 4,362 23,457 19,995 17.3
Operating Metrics
Credit cost 0.57 0.34 23 bps 0.30 0.58 0.42 16 bps
Advances 513,771 423,180 21.4 484,690 739,598 606,273 22.0
Gross NPA 8,756 7,704 13.7 8,484 10,710 8,295 29.1
Net NPA 3,793 3,751 1.1 3,612 3,731 3,961 (5.8)
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