stock advisory for today - natural view on the stock jsw steel ltd, marico and buy heromotoco

8/13/2019 Stock Advisory for Today - Natural View on the Stock JSW Steel LTD, Marico and Buy HEROMOTOCO

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Bank’s profit growth of 12.6% YoY despite of 21.6% YoY growth in NII and 28.6% growth in operating profit was largely due to higher ta

provisions made of bank (32.4% of PBT versus 27.9% of PBT in 2QFY14). During quarter, bank has created special reserve for deferred tax liabilit

to the tune of Rs.215 Cr as per recent RBI guideline dated 20th December 2013. Adjusting the same, profit grew by 22% YoY which was quit

impressive. But bank’s cost of fund increased higher than loan yield which would restrict margin expansion. We lower our book value estimate

to Rs.643 from earlier of Rs.657. Accordingly we reduce our target price to Rs.1094 from earlier of Rs.111

............................................................... Pa e : 20-24

3th Feb, 201

Edition : 197

IEA-Equity

Strategy

ICICI BANK : "BUY" 31th Jan 2014

We have rolled forward our valuation to FY16E earnings and maintained our Accumulated rating on CGL with a revised target price of Rs13

(Rs105 earlier) based on 14xFY16E EPS, driven by likely turnaround in international operations and a better earnings growth trajectory. W

believe that a record backlog, better/leaner cost structure, good & increasing product basket, improved reach in terms of geography will driv

earnings & intrest coverage ratio over the next few years. ................................................ ( Page : 18-19)

Maruti Suzuki India Limited : "NEUTRAL" 31th Jan 2014

The company for 3QFY14 has registered net sales of Rs 10620 Cr down by 2.7% YoY led by 4.5 % volume decline to 288151 units for the perio

under review. The decline in the volume came majorly due to weaker performance on export business front. Export sales volumes were dow

38.6% YoY ......................................................... ( Page : 16-17)

BANK OF INDIA : "BUY" 31th Jan 2014

Bank of India reported profit de-growth of 27% YoY largely due to higher loan loss provision. At operating profit level, bank reported 15.5% Yo

growth but higher provisions against loan loss (almost double from last quarter) drag profit downward. Bank’s loan and deposits gre

handsomely and asset qualities were also improved sequentially. Restructure loan was at Rs 1146 cr (0.3% loan) which is not alarming. We have

not found any stress at operating profit level. The stock is corrected almost 10% likely due to profit de-growth. We believe buffer up provisio

would be temporally phenomena. The stock could reshape its valuation multiple. We have buy rating on the stock with price target of Rs.21

...................................................... Pa e : 11-15

Crompton Greaves Ltd : "Rebounds begains…….." "BUY" 31th Jan 2014

JSW Steel’s third quarter performance was good and ahead of expectation by a huge margin. Consolidated net sales at Rs 13,383 crore , whil

Ebitda at Rs 2,409 crore. While net profit at Rs 466 crore came in below expectations of Rs 583 crore, it was largely due to adjustments o

account of merger with JSW Ispat.Crude steel production-wise, there is a 52% growth, to the tune of 3.17 million tonnes of stee

...................................................................... Pa e : 7-10

Marico : " Volume slows…" "NEUTRAL" 3th Feb 2014

Beats the street on profitability and Margin front with poor volume growth;Marico witnessed better numbers than expectation with 10% sale

growth (excluding Kaya Sales) led by 3% volume growth on YoY basis. We believe that slower volume growth could not easily turned out in nex

1-2 quarters because of poor discretionary demand environment. Therefore, we downgrade our view from "BUY" to "NEUTRAL

....................................................................... ( Page : 4-6)

HEROMOTOCO: Average Sales with Flat Profits Growth.. "BUY" 3th Feb 2014

The company registered its 3QFY14 net sales at Rs 6846 Cr up by 11.3% YoY led by healthy volume growth of 7% for the period under review

The company during 3QFY14 sold 1680940 units including exports. The volume performance was led by a strong 7.8% YoY growth in thdomestic segment. ..................................................................... ( Page : 2-3)

JSW STEEL LTD : "NEUTRAL" 3th Feb 2014

Narnolia Securities Ltd,

India Equity Analytics aily Fundamental Report on Indian Equities



1M 1yr YTD

bsolute -5.0 9.5 9.3

el. to Nifty -1.6 8.9 -4.4

Current 2QFY14 1QFY1

omoters 39.9 39.9 39.9

30.6 30.4 29.9

I 8.5 8.8 9.3

hers 21.0 20.9 8.7

Financials Rs, Cro

3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%

Revenue 6846 5696 20.2 6151 11.3

EBITDA 898 833 7.8 779 15.3

PAT 525 482 8.9 489 7.4

EBITDA Margin 13.1% 14.6% (150bps) 12.7% 50bps

PAT Margin 7.7% 8.5% (80bps) 7.9% (30bps)

HEROMOTOCO

Please refer to the Disclaimers at the end of this Report.

wk Range H/L 2215

6%

arket DataSE Code 500182

HEROMOTOCO

ock Performance-%

SE Symbol

hange from Previous -

The stock at its CMP of Rs 1979 which is 17.9x of one year forward FY14E EPS of Rs 1

and upcoming capacity expansion, Rising trend of volume growth of scooter busine

Improvement in operational efficiency are few factors which make us positive for the sto

We recommend BUY for the stock with Target Price Rs 2100.

ne Yr Price Vs NIFTY

(Source: Company/Eastw

1,434

verage Daily Volume 245841

fty 6089

hare Holding Pattern-%

kt Capital (Rs, Cr)

The operating EBITDA for the 3QFY14 came at Rs 898 Cr and OPM stands at 13

%.There is yearly rise in the OPM by nearly 40 bps however on sequential basis it h

shrunk by 150 bps due to led by increase in raw-material costs and significantly higher ot

expenditure. Raw material cost as a percentage of sales increased 120bp QoQ due to

currency impact on indirect imports, which comes with a quarter’s lag. The other expens

in the quarter rose significantly very high because of higher advertisement expenses duefestival season and also due to the launch of new products/ refreshes and higher roya

payments on the back of rising share of new products. Additionally, the ongoing c

reduction initiatives from the company led to a savings of Rs45 Cr during the quarter.

View & Valuation

The net profits for the stands at Rs 525 Cr for the quarter grew by only 7.5% yoy as the t

rate increased to nearly 27% from 16% earlier due to expiry of tax benefits at the Haridw

facility.

Post the 3QFY14 result management said that Industry motorcycle sales should be in

range of 5 % and it will be in that level for the year and HMC will be at par with th

Company has maintained its ad spend guidance at 2-2.5 % of sales and R&D spends

nearly 0.75% of sales. The capital expenditure guidance for FY2014 stands at Rs1100 C

Rs1200 Crr.For FY2015 the company has guided for Rs 1,500 Cr to Rs1,800 Cr.

The Management indicated that the current dividend policy of 35-45% payout will continue

future. The total installed capacity of the company currently stands at 6.9mn units. Post

commissioning of the Neemrana plant, scheduled by end of March 2014, the installed capacit

expected to increase to 7.65mn units.

Average Sales with Flat Profits Growth..

esult Update BUY

MP 1979

The company registered its 3QFY14 net sales at Rs 6846 Cr up by 11.3% YoY led

healthy volume growth of 7% for the period under review. The company during 3QFY

sold 1680940 units including exports. The volume performance was led by a strong 7.8YoY growth in the domestic segment, while export volumes posted a decline of 26.5% Y

mainly due to a weak demand environment in major exporting nations. Scooters sa

maintained strong momentum, led by the success of Maestro.

The average realization for the quarter moved up and came around at Rs 41000 verses

39100 for the same time last fiscal. The net average realization for the quarter was driven

price increases, which were undertaken in April and October 2013.

pside

arget Price 2100evious Target Price -

"BUY" 3rd

Feb' 14.




Marico

-

1M 1yr YTD

bsolute -3.6 2.4 0.5

l. to Nifty -10.8 -7.9 -9.1


omoters 59.69 59.69 59.72

27.58 27.6 27.96

I 5.72 5.88 5.19

hers 7.01 6.83 7.13

Financials Rs, Cro


Revenue 1089.29 1115.36 (2.3) 1155.89 -5.8

EBITDA 201.81 168.51 19.8 165.8 21.7

PAT 135.4 105.9 27.9 102.3 32.4

EBITDA Margin 18.5% 15.1% 340bps 14.3% -

PAT Margin 12.4% 9.5% 290bps 8.9% -

ock Performance

MARICO

pside -

fty 6090

arket Data


year forward P/BV-X

(Source: Company/Eastwin

View and Valuation: The company expects demand scenario to remain challengi

especially in urban areas in India and some of its international market like Banglades

Egypt and MENA. Based on hypothesis, management is expecting regarding the botto

out of volume decline but they are not ignoring the threat of demand environme

challenges for near future. We believe that slower volume growth could not eas

turned out in next 1-2 quarters because of poor discretionary demand environme

Therefore, we downgrade our view from BUY to NEUTRAL on the stock, at a price of

214, stock trades at 4.9x FY15E P/BV.

Mix segmental growth: India FMCG business grew by 10%(YoY). Parachute’s rig

portfolio (packs in blue bottles), recorded a volume growth of about 2% during Q3FY

over Q3FY13. Parachute along with Nihar marginally improved its market share over t

same period last year to 56%. The Saffola refined edible oils franchise grew by about 9

in volume terms during Q3FY14. During the quarter, Saffola average price hiked by 4-5

to manage its RM cost and Packaging materials. Marico’s hair oil brands (Parachu

Advansed, Nihar Naturals and Hair & Care) grew by 8% (YoY) in volume terms duri

Q3FY14.

esult update Neutral

ange from Previous

" Volume slows…"

MP 214

rget Price -

evious Target Price -

Marico witnessed better numbers than expectation with 10% sales growth (exclud

Kaya Sales) led by 3% volume growth on YoY basis. PAT grew by 31% (YoY) because

cost rationalization across various head of expenses like Ad Spend, employee cost eHowever, the profits of Q3FY14 are not strictly comparable to Q3FY13 due to t

change in the method of depreciation from WDV to SLM carried out in Q4FY13 a

demerger of Kaya business.

Beats the street on profitability and Margin front with poor volume growth;

Margin ramp up: During the quarter, its EBITDA margin of the India FMCG busine

during Q3FY14 was 18.7% and PAT margin was at 11.3%. The Company believes that

operating margin in the band of 17% to 18% is sustainable in the medium term. On Y

basis margin growth could not computed because of Kaya consolidation in same quart

previous year.

Poor volume growth: Because of weak demand discretionary environment and so

political instability in some regions, its volume growth of various segments have com

down during the quarter. The volume growth in India was marginally above 3% for t

quarter, reflecting continued soft consumption trends. Post earning, manageme

stated that the trend of volume decline has bottomed out based on hypothesis.

The Company maintained its market share across the portfolio, reflecting strong equ

of its brands, even though the rates of category growth have decelerated over the pa

few quarters. We believe that slower volume growth could not easily turned out in ne

1-2 quarters because of poor discretionary demand.

kt Capital (Rs Cr) 13829

erage Daily Volume 126142

are Holding Pattern-%

E Code 531642

SE Symbol

wk Range H/L 248/188

"NEUTRAL"3rd Feb' 14





Marico

les (cr) and Growth (%) -

(Source: Company/Eastwind)

argin-%

penses on Sales -%

For 2QFY14, Marico reported 4% (Y

decline in sales growth because of sluggvolume growth impacted by weaker dema

in urban area.

The demerger of Kaya is on the way, a

new demerged entity would expected to

listed by November or December.

Because of cost control in ad spend200bps and Raw material about 190bps,

margin gone up by 210 bps to 15.1% on Y

basis.

eographical challenges: International market recorded a growth of 15%. Because of

litical uncertainty, Bangladesh sales declined by 14%(YoY). While, the MENA business

an average grew by 10% CC basis. The business in Egypt grew by 22% mainly led byrong volume growth in Haircode and Fiancée. The business in GCC continued to report a

cline. Political environment in Egypt seems to have bettered for the time being with no

ajor report of violence, however the uncertainty continues. South Africa reported a top-

e growth of 5%. The business in South East Asia of which Vietnam comprises a

gnificant portion grew by 24% in constant currency terms.






) Operating Margin could sustain at a range of 17-18% in the medium term.

) The Youth brands portfolio is expected to grow by about 20% to 25%.

) In near term, Company does not expect to see any price hike decision.

Marico

y facts from Management guidance;

nancials

) Management believes that the decline trend of volume growth has turned out, while

e economic environment is still challenging and there will be gradual recovery.


) Immediate future could see volume growth rates of 7%- 8%. With the price increases

ready in market place the overall sales growth could still be in the region of 12%-14%.

is is expected to improve from early/mid FY15.

(Source: Company/Eastwi


s in Cr, FY10 FY11 FY12 FY13 FY14E FY15E

ales 2500.09 3134.99 4008.28 4259.53 4740.86 5344.65

Other Operating Income 160.67 19.06 30.90 12.51 14.22 16.03

otal income from operations 2660.76 3154.05 4039.18 4596.86 4755.08 5360.68

M Cost 1265.48 1712.66 2132.04 2212.27 2228.20 2672.32

urchases of stock-in-trade 12.47 20.36 17.44 116.59 48.53 54.71WIP -16.35 -115.43 -50.78 -127.47 -98.72 -111.29

mployee Cost 190.13 229.98 307.29 380.56 380.41 428.85

d Spend 351.12 345.95 448.99 597.94 618.16 643.28

Other expenses 482.76 523.36 668.90 791.07 808.36 911.32

otal expenses 2285.61 2716.88 3523.88 3970.96 3984.94 4599.19

BITDA 375.15 437.17 515.30 625.90 770.14 761.49

epreciation and Amortisation 60.06 70.80 72.52 86.62 145.44 133.80

Other Income 18.26 2.16 1.67 37.52 19.17 21.61

xceptional Item -9.79 48.91 -1.75 33.20 33.29 37.52

BIT 323.56 417.44 442.70 610.00 677.15 686.82

nterest 25.69 41.01 42.39 57.43 57.43 57.43

BT 297.87 376.43 400.31 552.57 619.72 629.39

ax Exp 64.33 84.98 78.25 146.18 163.95 166.50

AT 233.54 291.45 322.06 406.39 455.78 462.89

rowth-% (YoY)

ales 11.4% 18.5% 28.1% 13.8% 3.4% 12.7%

BITDA 29.2% 16.5% 17.9% 21.5% 23.0% -1.1%

AT 33.5% 24.8% 10.5% 26.2% 12.2% 1.6%

xpenses on Sales-%

M Cost 47.6% 54.3% 52.8% 48.1% 46.9% 49.9%

d Spend 13.2% 11.0% 11.1% 13.0% 13.0% 12.0%

mployee Cost 7.1% 7.3% 7.6% 8.3% 8.0% 8.0%

Other expenses 18.1% 16.6% 16.6% 17.2% 17.0% 17.0%

ax rate 21.6% 22.6% 19.5% 26.5% 26.5% 26.5%

Margin-%

BITDA 14.1% 13.9% 12.8% 13.6% 16.2% 14.2%

BIT 12.2% 13.2% 11.0% 13.3% 14.2% 12.8%

AT 8.8% 9.2% 8.0% 8.8% 9.6% 8.6%

aluation:MP 108.55 138.75 206.00 216.95 214.00 214.00

o of Share 60.90 61.40 61.40 64.48 64.48 64.48

W 653.96 915.44 1143.01 1981.52 2399.58 2824.75

PS 3.83 4.75 5.25 6.30 7.07 7.18

VPS 10.74 14.91 18.62 30.73 37.21 43.81

oE-% 35.7% 31.8% 28.2% 20.5% 19.0% 16.4%

/BV 10.11 9.31 11.07 7.06 5.75 4.88

/E 28.31 29.23 39.27 34.42 30.28 29.81



JSW STEEL LTD.

A steely performance

917

797

NA-13%

NA

500228

22175

11087

6089

1M 1yr YTD

solute -9.1 5.5 7.0 Operational Efficiencies

l. to Nifty -6.3 4.0 5.7

2QFY14 1QFY14 4QFY13

omoters 37.3 36.3 35.8

18.6 17.2 18.0

4.9 6.3 6.1

hers 39.2 40.3 40.1 Exports boost

Financials : Q3FY14 Y-o-Y % Q-o-Q % Q3FY13 Q2FY1

Net Revenue 13623 53 5 8888 1298EBITDA 2409 81 3 1331 234

Depriciation 806 43 0 563 80

Tax 374 -2300 214 -17 11

PAT 466 -733 -504 -74 -11(In Cr

tial Coverage Neutral

MP JSW Steel’s third quarter performance was good and ahead of expectation by a hug

margin. Consolidated net sales at Rs 13,383 crore , while Ebitda at Rs 2,409 crore. Whil

net profit at Rs 466 crore came in below expectations of Rs 583 crore, it was largely duto adjustments on account of merger with JSW Ispat.Crude steel production-wise, ther

is a 52% growth, to the tune of 3.17 million tonnes of steel. Also,reduced inventories b

17,000 tonnes and sold 3.08 million tonnes of steel in this quarter, showing a growth o

42% in terms of volume. Therefore, the volume of production and sales have contribute

to the bottom line.Secondly, the operational efficiencies which were brought in ar

clearly visible in the results. EBITDA per tonne improved and the EBITDA margin is 19.3%

as against 15.8% in the corresponding quarter of last year, showing a significan

improvement of 3.5%.

rget Price

evious Target Priceside

ange from Previous

JSL also reported higher incidence of tax amounting to 374 crore with an effective ta

rate at 45% in Q3FY14. The iron ore situation has improved in Karnataka but is below thcompany’s comfort levels. We have a cautious view on the stock due to elevated deb

levels and stretched valuations.

ock Performance-%

arket Data

E Code

E Symbol JSWSTEEL

wk Range H/L 1046/451

kt Capital (Rs Crores)

erage Daily Volume (Nos.)

fty

The operating margins are under pressure due to the high cost of raw materials.

company is operating only at 80 per cent of the capacity at Vijayanagar in Bellary distric

The company is sourcing ore from Odisha, Jharkhand and Chhattisgarh besides importin

ore for its Dolvi and Salem plants. It is, however, left with little option to source the raw

material for its Karnataka plant.

Source - Comapany/EastWind Research


This performance is remarkable looking at the fact that JSW’s operations are no

backward integrated in terms of basic raw material like coal and iron ore. While it

dependent on imported coal to meet its energy requirements, the company has bee

grappling with iron ore availability issues in Karnataka for quite a while due to minin

curbs. However, the company’s ability to export a substantial portion of its steel outpu

has acted as a natural hedge as well as boosted its overall revenues and profitability.

are Holding Pattern-%

JSW’s exports touched one-million-tonne (mt) mark, which was 60 per cent of India

overall steel exports and accounted for 32.4 per cent of the company’s steel sales of 3.0

mt (up 42 per cent year-on-year). Management of JSW Steel, said they are looking a

increasing exports, especially the value-added products to developed markets to boos

profitability.

yr Forward P/B

"Neutral"3rd Feb' 14


0

00

00

00

00

00

00

- -

J l - - -

J l - - -

J l - -

PRICE 0.5x

1x 1.5x



on ore availability remains still challenging

eel Demand Healthy Outlook

pex Guidiance

bout The Company.

8

During the quarter, the company commissione

a waste heat recovery system for BF-4 stov

heating process. The pickling cum couple

tandem cold rolling mill (PLTCM) facility, whic

is part of phase 1 of CRM2 project h

commenced commercial production

Vijayanagar from December 1, 2013.

e management has maintained its earlier annual guidance of saleable steel sales

lume of 11.55 MT. However, based on 9MFY14 reported volume of 8.76 MT we

lieve JSL will exceed its sales volume target. We have modelled sales volume of 11.75T for both FY14E and FY15E.

e work on turning around JSW Ispat’s operations is on and its Dolvi unit (currently

perating at 87-88 per cent utilisation) will become more profitable after the pallet and

ke oven plants are commissioned.JSW’s largest unit at Vijaynagar in Karnataka,

wever, is running at 83 per cent capacity utilisation. The iron ore availability situationKarnataka still remains challenging. While the overall availability in the state has

proved to 18 mt, steel industries’ requirement in the state is close to 30 mt. JSW, to

eet its requirement, still depends on supplies from outside the state to the extent of

-25 per cent. Landed blended coal costs for JSW are about $160-165 a tonne and

ely to remain at similar levels during the March quarter, too, believes the

anagement.

e company remains upbeat on steel demand scenario, especially from emerging

arkets. While Rao said that with Chinese steel production declining, exports from

merging markets should pick up during FY15.JSW Steel, also increased prices by up to

1,200 a tonne, or up to two per cent, across the board for February, its second

crease in a month, which should support profitability.

e management has front ended its capex programme (10500 crore in FY14-16) with a

pex guidance of 5500 crore for FY14 as against 4000 crore guided in Q2FY14. For

15, the company has maintained the guidance of 4000 crore with the balance to be

curred in FY16E.

oing ahead, the company expects its profit margin to improve with the commissioning

coke oven and pallet plants at its Dolvi unit in Maharashtra. Besides, the availability

iron ore in Karnataka is set to improve with the Supreme Court directing the State

d Central governments to submit an action plan to improve supply. We value the

ock,and we are Neutral on the stock at a Target price Rs.797.

W Steel is India’s leading private sector steel producer and among the world’s most

ustrious steel companies.JSW Energy Ltd., a power utility arm of Sajjan Jindal-led JSW

oup,was incorporated in 1994. Currently, it owns 3.1GW of operationalpower plants,

th another 7GW under various stages of development.It came up with an IPO in 2009Rs100/share. Around 50% of thecurrent operational capacity is on merchant.

Project Updates

SW STEEL LTD.




FY12 FY13 FY14E FY15E

34368 38210 49817 4900021879 24158 29440 28518

846 980 1301 1299

1752 2041 3879 4043

2041 2284 3228 2989

28266 31706 40937 39984

6102 6504 8880 9016

1933 2237 3179 3280

1933 2237 3179 3280

1427 1967 3076 3200

2818 2369 2730 2686

500 845 710 5372318 1523 2020 2149

14 9 12 11

24.1 43.2 15.0 88.8

9

AT WITHOUT EXCEPTIONAL ITEMS

OE%

S

ITDA

epriciation

epriciation

terest Cost

BT

et tax expense / (benefit)

SW STEEL LTD.

L PERFORMANCE

wer Fuel

her expences

penditure

et Revenue from Operationost Of Projects & Contractual

mployee benefit Expence

All India Steel Imports & Exports

India turns into a net exporter; exports surge o

the back of improving demand in develope

markets and INR depreciation enhancing expo

competitiveness




FY10 FY11 FY12 FY13

527 563 563 563

8730 15966 16186 16781

9257 16529 16750 17344

13454 12173 12889 173932719 4302 1376 1653

35 53 35 41

1706 2487 9714 10251

230 347 231 308

35686 46167 54238 57728

254 376 39 55

21198 25435 32529 33348

6956 6508 2832 5898

927 1246 2818 3342

2867 4410 5789 5495

696 933 1462 2106

303 2048 3047 1653

677 910 2058 2535

35686 46167 54238 57728

FY10 FY11 FY12 FY13

2.5 1.2 1.0 0.9

85.4 78.6 24.1 43.2

3.7 3.9 4.3 5.5

9.0 10.4 28.3 26.8

1.5 1.8 1.7 1.4

8.0 6.9 6.7 4.0

14.2 12.8 12.1 11.1

20.9 19.3 17.7 17.014.5 11.7 29.9 15.5

9.6 7.5 4.5 5.0

5.8 4.9 1.5 2.4

6.8 5.7 10.0 10.3

1.7 1.0 0.9 1.1

10

SW STEEL LTD.

are capital

serve & Surplus

tal equity

ng-term borrowingsort-term borrowings


ventories

ade receivables

S

ebtor to Turnover%

rading At :

ATIOS

PM %

pital work-in-progress

ng-term loans and advances

S PERFORMANCE

ng-term provisions

ade payables

ort-term provisions

tal liabilities

sh and bank balances

editors to Turnover%

tal Assets

B

tangibles

ngible assets

ROCE VS Weighted Avg Cost to Debt




ort-term loans and advances

eighted Average Cost of Debt %

ebt/Equity

PM %

ITDA %E

V/EBIDTA

OCE%

ventories to Turnover%


0

0

0

0

0 NIFTY JSWSTEEL



BANK OF INDIA

187

217235

16

1M 1yr YTD

bsolute -21.6 -47.5 -18.1

el.to Nifty -17.9 -47.5 -18.1


omoters 64.1 64.1 64.1

I 13.2 13.6 13.5

I 15.3 15.6 16.3

hers 7.4 6.7 6.0

Financials Rs, Cr

2011 2012 2013 2014E 2015E

NII 7878 8313 9024 10578 10869

Total Income 10519 11635 12790 15082 15373

PPP 5398 6694 7458 8701 8917

Net Profit 2542 2678 2749 2776 3170

EPS 46.5 46.7 47.9 43.2 49.4

ANKINDIA Vs Nifty




NII growth on the back of higher loan growth and margin expansion

Operating leverage remained stable

Bank’s operating leverage remained stable at 0.3% which is quite impressive.

absolute term, operating expenses increased by 20.3% YoY in which employee co

and other operating expenses increased by 18.7% and 22.8% respectively. Healt

NII growth and higher operating cost led pre provisioning profit growth of 15.5% Yo

Loan loss provisions were almost double from last quarter, but asset quality

improved

Provisions and contingencies increased by 53.3% which includes loan loss provisi

of Rs.1173 cr which was double from last quarter. But in absolute term, GNP

marginally increased by 1.4% on sequential basis while in percentage to gro

advance, it improved by 12.5 bps to 2.8% from 3%. Provisions were little higher

4% in sequential basis taking almost flat improvement in net NPA. In percentag

term, NPA improved to 1.7% from 1.9% in previous quarter. Provision coverage ra

without technical write-off was 38.7% and with technical write off, it stood at 63.8

Slippage during the quarter was at Rs.1747 cr (2% of advance) versus Rs.1469

(1.8% of advance).

2271804

fty 6074

kt Capital (Rs Cr)

MP

arget Price

Ban k of India repor ted profi t de-gro wth of 27% YoY largely du e to high er loa

loss p rovis ion. At operat ing prof it level, bank reported 15.5% YoY grow th b

high er prov ision s against loan loss (almo st doub le from last quarter) drapro f i t downward . Bank’s loan and deposi ts grew handsomely and ass

qualit ies w ere also im prov ed sequential ly . Restructu re loan was at Rs 1146

(0.3% loan ) wh ich is not alarm ing . We hav e no t fou nd any stres s at op eratin

prof it level. The stock is c orrected almo st 10% likely du e to prof it de-grow t

We believe buffer up prov ision wo uld be tempo rally phenomen a. The stoc

cou ld reshape its valuat ion mult ip le. We have buy rat ing on the stock wi

pr ice targ et of Rs.217.

ompany Update BUY

During quarter, Bank India reported NII growth of 17.8% YoY to Rs.2719 cr vers

our expectation of Rs.2683 largely due to higher than expected loan grow

improvement in credit deposits ratio and margin expansion. Bank reported oth

income of Rs.1097 cr versus Rs.937 cr in last quarter and Rs.1097 cr in previo

quarter. Total revenue grew by 17.6% YoY to Rs.3816 cr.

verage Daily Volume

12260

evious Target Price

arket Data

pside

393/126

SE Code

hange from Previous

532149

ock Performance

2wk Range H/L

"BUY"31th Jan, 2014




BANK OF INDIA


alance sheet growth impressive

e are impressed with bank’s balance sheet growth trajectory during the quarter as bank

ported deposits growth of 30% YoY higher than peers (result so far announced) led by

rm deposits growth of 35% YoY. Current deposits and saving deposits reported growth

24% and 14% respectively taking overall CASA deposits growth of 16%. In percentagetotal deposits, CASA ratio declined to 22.5% from 24.6% in 3QFY13 largely due to

gher growth in term deposits than CASA deposits. Loan grew by 27.2% YoY which is

ghest so far result announced. Credit deposits ratio for the quarter stood at 77.4% as

gainst 76.8% in previous quarter and 79.2% in last quarter.

argin expansion led by imrprovement in investment yield

M for the quarter was 2.89%, an improvement of 50 bps YoY due to improvement of

vestment yield. However fund yield and cost of fund both were declined marginally in

quential but investment yield improved to 8.2% from 7.9% in previous quarter.

rofit declined on account of higher loan loss provisions

ank of India (Bank India) profit was declined by 27.1% YoY to Rs.586 cr as against our

xpectation of Rs.602 cr. Profit growth was lower on account of 98% YoY rise in loan loss

ovisions. Overall provisions were increased by 53.3% YoY which drag PBT to 21.3%

oY de-growth. Tax rate were 21% versus 28.5% of PBT in previous quarter and 14.5 of

BT in 3QFY13. Total provisions for the quarter stood at 0.4% of net advances higher

an 0.28% in 3QFY13.

aluation & View

ank of India reported profit de-growth of 27% YoY largely due to higher loan loss

ovision. At operating profit level, bank reported 15.5% YoY growth but higher provisions

gainst loan loss (almost double from last quarter) drag profit downward. Bank’s loannd deposits grew handsomely and asset qualities were also improved sequentially.

estructure loan was at Rs 1146 cr (0.3% loan) which is not alarming. We have not

und any stress at operating profit level. The stock is corrected almost 10% likely due to

ofit de-growth. We believe buffer up provision would be temporally phenomena. The

ock could reshape its valuation multiple. We have buy rating on the stock with price

r et of Rs.217.




BANK OF INDIA

Source: Eastwind/Company



arterly Result 3QFY14 2QFY14 3QFY13 % YoY Gr % QoQ Gr 3QFY14E Variation

erest/discount on advances / bills 7017 6631 5791 21.2 5.8 6910 -1.5

ome on investments 2207 2129 1809 22.0 3.7 2261 2.5

erest on balances with Reserve Bank of India 546 479 298 83.4 14.0 472 -13.5

al Interest Income 9769 9239 8023 21.8 5.7 9644 -1.3

ers Income 1097 1100 937 17.1 -0.3 1141 4.0

al Income 10866 10340 8960 21.3 5.1 10784 -0.8

erest Expended 7050 6712 5714 23.4 5.0 6960 -1.3

2719 2527 2308 17.8 7.6 2683 -1.3

er Income 1097 1100 937 17.1 -0.3 1141 4.0

al Income 3816 3627 3246 17.6 5.2 3824 0.2

ployee 989 897 833 18.7 10.2 931 -5.8

er Expenses 684 628 557 22.8 8.8 674 -1.3

erating Expenses 1672 1525 1390 20.3 9.7 1606 -4.0

( Rs Cr) 2144 2102 1856 15.5 2.0 2218 3.4

visions 1404 1232 916 53.3 13.9 1382 -1.5

Profit 586 622 803 -27.1 -5.8 602 2.7

ance Sheet Data

ity Capital 643 597 575 11.9 7.8 597 -7.2

erve & Surplus 26,672 25,686 22,698 17.5 3.8 27,243 2.1

posits 454,140 432,282 349,117 30.1 5.1 449,063 -1.1

rowings 40,545 41,751 28,686 41.3 -2.9 42,513 4.9

er liabilities and provisions 14,492 12,727 14,890 -2.7 13.9

al Liability 536,492 513,042 415,966 29.0 4.6 -100.0

h in hand 21,406 24,621 17,940 19.3 -13.1 -100.0

h and balances wi th reserve bank of india 39,662 34,658 22,580 75.7 14.4 -100.0

estment 108,253 107,413 86,083 25.8 0.8 2,261 -97.9

vance 351,725 332,190 276,486 27.2 5.9 345,503 -1.8

ed Assets 2,975 2,957 2,853 4.3 0.6

ers Assets 12,470 11,203 10,024 24.4 11.3

al Assets 536,492 513,042 415,966 29.0 4.6

et Quality

PA 9881 8765 8898 11.0 12.7

A 6156 5947.3 5,228 17.7 3.5

PA(%) 3.0 3.0 3.5

A(%) 1.9 2.0 2.0

R(%) Without technical write off 37.7 32.1 41.2



BANK OF INDIA

Source: Eastwind/Company



nancials & Assuption 2011 2012 2013 2014E 2015E

terest/discount on advances / bills 15570 20241 23139 27015 31171

come on investments 5195 7142 7261 8562 10773

terest on balances with Reserve Bank of India 798 834 1257 1987 1987

hers 295 264 251 1 1tal Interest Income 21858 28481 31909 37565 43932

hers Income 2642 3321 3766 4504 4504

tal Income 24500 31802 35675 42069 48436

terest on deposits 12218 17957 20238 29922 30362

terest on RBI/Inter bank borrowings 813 1145 1489 1419 1419

hers 950 1065 1158 1281 1281

terest Expended 13981 20167 22885 26987 33063

I 7878 8313 9024 10578 10869

her Income 2642 3321 3766 4504 4504

tal Income 10519 11635 12790 15082 15373

mployee 3492 3069 3131 0 3810

her Expenses 1629 1871 2201 0 3656perating Expenses 5121 4941 5332 6381 6457

P( Rs Cr) 5398 6694 7458 8701 8917

ovisions 2909 4016 4709 4766 5045

et Profit 2542 2678 2749 2776 3170

46.0 5.3 2.7 1.0 14.2

ey Balance Sheet Data

eposits 299559 318216 381840 465844 535721

eposits Growth(%) 30 6 20 22 15

rrowings 22021 32114 35368 43275 49766

rrowings Growth(%) -2 46 10 22 15

an 213708 248833 289367 358816 366720

an Growth(%) 26 16 16 24 2

vestment 86677 86754 94613 117097 134662

vestment Growth(%) 27 0 9 24 15

astwind Calculation

eld on Advances 7.3 8.1 8.0 7.5 8.5

eld on Investments 6.3 8.7 7.1 7.3 8.0

eld on Funds 6.5 7.8 7.7 7.5 8.4

st of deposits 4.1 5.6 5.2 6.4 5.7

st of Borrowings 8.0 6.9 6.8 7.5 7.5

st of fund 4.3 5.8 5.3 5.3 6.2

aluation

ok Value 322.7 365.3 416.9 434.0 0.0

BV 1.5 1.0 0.7 0.6 0.5

E 10.3 7.7 6.3 5.6 4.9



1M 1yr YTD

bsolute -7.1 2.9 35.0

el. to Nifty -3.4 2.5 22.0


omoters 56.2 56.2 56.2

21.5 19.7 22.0

I 14.0 15.4 13.1

hers 8.3 8.8 8.7

Financials Rs, Cro


Revenue 10894 10468 4.1 11200 -2.7

EBITDA 1355 1321 2.6 891 52.0

PAT 681 669 1.8 501 35.9

EBITDA Margin 12.4% 12.6% (20bps) 8.0% 450bps

PAT Margin 6.3% 6.4% (10bps) 4.5% 180bps

MP 1638 The company for 3QFY14 has registered net sales of Rs 10620 Cr down by 2.7% YoY

by 4.5 % volume decline to 288151 units for the period under review. The decline in

volume came majorly due to weaker performance on export business front. Export savolumes were down 38.6% YoY and 41.3% QoQ to 19,966 units.

arget Price 1700

evious Target Price -pside 4%

Maruti Suzuki India Limited

esult Update NEUTRAL Result Analysis:

hange from Previous - EBITDA for MSIL is up 52% YoY to Rs.1,355 Cr and EBITDA margin was up 448 bps Y

to 12.3%. However results are not comparable on yearly basis as 3QFY13 does

include impact of SPIL merger. Raw material cost as % of net sales is down 671 b

YoY.Employee cost as % of net sales is up 62 bps YoY but down 82 bps QoQ

2.8%.Royalty payments for Q3 FY14 were around levels of H1 FY14.

arket Data

SE Code 532500

SE Symbol MARUTI

verage Daily Volume 423015 On realization front, the Net realization for company is up 1.4% YoY to Rs.368547 howe

there is sequential decrease in net realization mainly due weak product mix, lower exp

sales number and higher contribution of Mini Segments. Discounts in 3QFY14 is at all ti

high to Rs.19412/unit vs. 17,500/unit QoQ.

fty 6073

ock Performance-%

2wk Range H/L 1864/1217 The net profits for the company during 3QFY14 came at Rs 681 Cr and NPM at 6

%.Effective tax rate is around 23.1%.arket Cap (Rs/Cr) 22,266

Recent Event :

MSIL has announced that the proposed capacity expansion (1.5 Million units per annum)

Gujarat would be through a 100% Suzuki (parent) owned subsidiary. The subsidiary wo

be fully dedicated to Maruti.

hare Holding Pattern-% How we see the deal :

1.The near term effect of the deal on PAT is neutral, as this Greenfield facility at Gujrat

take 2 -3 year to get commissioned and another 1 year to get its full capacity utilization, t

translates period FY17 onwards.

2.The MSIL is getting cars at cost of manufacturing plus portion of incremental capex wh

means MSIL will lose manufacturing margins and will getting only the trading margin. T

newly formed company will be 100 % subsidiary of Suzuki Motors Limited.

ne Year Price Vs NIFTY 3.The profit sharing from the upcoming Gujrat facility would depend on the stake of Suz

Motor in MSIL.

4..In any case Suzuki Motor will make profit equal to its stake in MSIL whether it makes

own capex as in this case or MSIL made capex then why did Suzuki made this huge cape

View & Valuation:

At CMP Rs 1638 the stock is trading at highest 5 year historical P/E multiple and in curr

scenario we donot see much upsides from hereon. Therefore we are Neutral for the sto

with target price Rs 1700.The CMP seems to factored almost all the upsides includ

improving operational efficiency and volume growth. The stock may see some upw

movement from current price on buzz that Suzuki may increase its stake in MSIL.

(Source: Company/Eastw


"NEUTRAL"31st Jan' 14




Raw material cost as % of net sales is do

671 bps YoY. Employee cost as % of net sa

is up 62 bps YoY but down 82 bps QoQ

2.8%.

Maruti Suzuki India Limited

raphical Represenation

ALES & PAT TREND

Net sales of Rs 10620 Cr down by 2.7% Yled by 4.5 % volume decline to 288151 un

for the period under review.


PM & NPM TREND




ALIZATION PER VEHICLE

Net realization for company is up 1.4% YoY

Rs.368547 however there is sequen

decrease in net realization mainly due w

product mix, lower export sales number a

higher contribution of Mini Segments




- Crom ton Greaves Ltd.

MP 110

rget Price 130evious 120

side 15%

ange from 8%

arket Data

E Code 500093

E Symbol

4,251

775,133

fty 6,074

ock

1M 1yr YTD

solute (14.2) 2.3 17.9

l. to Nifty (10.6) 2.3 11.0

are

3QFY14 2QFY14 1QFY14

omoters 42.5 42.5 41.7

18.5 16.6 15.2

23.8 24.5 23.7

hers 15.2 16.5 19.4

Financials Rs, CroreConsolidated 3QFY14 2QFY13 (QoQ)-% 3QFY13 (YoY)-%

Revenue 3351.9 3204.9 4.6% 2971.8 12.8%

EBITDA 169.3 161.3 5.0% 2.0 8322.4

PAT 59.5 57.8 3.0% -69.0 186.2%

EBITDA Margin 5.1% 5.0% 10 bps 0.1% 500 bp

PAT Margin 1.8% 1.8% 0 bps -6.3% 810 bp

yr Forward P/B

CROMPGREAV

(Consolida


We have rolled forward our valuation to FY16E earnings and maintained our Accumulated rat

on CGL with a revised target price of Rs130 (Rs105 earlier) based on 14xFY16E EPS, driven

likely turnaround in international operations and a better earnings growth trajectory. We belie

that a record backlog, better/leaner cost structure, good & increasing product basket, improv

reach in terms of geography will drive earnings & intrest coverage ratio over the next few yea

It has assumed break even EBIT level for international subsidiaries in FY14. Further, In our vie

the stock's performance would largely be driven by an improvement in overseas business, thou

standalone performance would protect downsides.

Valuations :

(Source: Company/ Eastwind Research)

Consolidated order book at the quarter ended Dec'14 was Rs. 10074 crore, up 9.12% yoy.

Consolidated order inflow for the quarter was Rs. 2624 crore up 15.7% yoy. Crompton expects

robust order intake in high value-added segments like UHV/EHV in Asia, Automation/smart gri

in the power segment, Motors in EMEA market, Railway transportation and electronic drives in

the industrial segment.

erage Daily Volume

Order scenerio :

Domestic power systems and consumer products segment were key margin drivers as th

sustained healthy operating margins of 9.4% and 11.7%, respectively. Collectively, both segme

constitute 41% of total consolidated revenue. Consumer products segment continued its mar

share expansion following higher distribution reach in categories like lighting (up 17% yoy a

fans up 13% yoy.

Margin to improve further :

"Rebounds begains…….."

Accumulateesult update

kt Capital (Rs Crores)

wk Range H/L 72/137

Crompton consolidated net sales rose 12.8% on yearly basis to Rs 3351.9 crore during

quarter, which were inline with street expectations. Consolidated earnings before interest, t

depreciation & amortisation (EBITDA) stands to Rs 169.3 crore and EBITDA margin atpercent. Power systems revenues increased 17.3 percent on yearly basis to Rs 2132.2 cr

during Dec quarter FY14, and earnings before interest & tax (EBIT) from power segment dur

the quarter were Rs 53.3 crore. Meanwhile, its consumer products and industrial syste

divisions posted single digit growth in topline during the quarter and it gone by 7.3% to Rs 6

crore. EBIT of consumer products rose to Rs 75.9 crore up by 19.9% and industrial syste

EBIT decreased by 42.7% to Rs 29.5 crore. Other income jumped 33.0% yoy to Rs 40.4 cr

while finance cost climbed to Rs 26.7 crore up by 25.6% yoy. At the current level of INR 110,

maintain 'ACCUMULATE' at the Stock as Power sector has shown sign of revival by posting

EBIT of Rs 53.3 crore VS Loss of Rs 104.6 crore qoq and also performance of Consumer divis

was satisfactory with a sales growth of 7.25% yoy and EBIT Growth of 19.9%.

"Accumulate"31th Jan' 14





y financials

Crom ton Greaves Ltd.

urce: Company/ Eastwind Research)


ARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E

erformance

evenue 8737 9141 10005 11249 12094 13304 14634 16098

ther Income 74 110 113 63 75 110 110 110

otal Income 8811 9251 10118 11311 12170 13414 14744 16208

BITDA 996 1278 1344 804 383 665 922 1014

BIT 874 1122 1150 544 180 412 669 736

EPRICIATION 122 155 194 260 203 253 253 278

TREST COST 81 43 34 57 71 90 100 110

BT 867 1190 1229 550 185 432 679 736

AX 305 365 310 182 101 137 215 233

xtra Oridiniary Items 0 35 -38 0 -121 0 0 0

eported PAT 563 860 881 368 -37 295 464 502

vidend (INR) 75 82 82 52 30 52 52 52

PS 1.2 1.3 1.3 0.8 0.5 0.8 0.8 0.8PS 8.8 13.4 13.7 5.7 -0.6 4.6 7.2 7.8

eild %

BITDA % 11.4% 14.0% 13.4% 7.1% 3.2% 5.0% 6.0% 6.0%

PM % 6.4% 9.4% 8.8% 3.3% -0.3% 2.2% 3.0% 3.0%

rning Yeild % 13.0% 5.2% 5.1% 4.1% -0.6% 4.2% 6.6% 7.1%

vidend Yeild % 1.7% 0.5% 0.5% 0.6% 0.5% 0.7% 0.7% 0.7%

OE % 30.7% 34.3% 26.9% 10.2% -1.0% 8.4% 11.8% 11.4%

OCE% 25.2% 30.0% 24.9% 9.2% 0.6% 7.5% 11.3% 11.5%

osition

et Worth 1831 2504 3275 3611 3562 3529 3941 4391

otal Debt 718 501 395 985 1851 2000 2000 2000

apital Employed 2549 3005 3670 4596 5413 5529 5941 6391

o of Share (Adj) 64 64 64 64 64 64 64 64

MP 68 256 268 138 94 110 110 110

aluation

ook Value 28.5 39.0 51.0 56.3 55.5 55.0 61.4 68.4

/B 2.4 6.6 5.3 2.5 1.7 2.0 1.8 1.6

t/Coverage 10.8 26.2 33.5 9.6 2.5 4.6 6.7 6.7

/E 8 19 20 24 24 15 14



981

10941118

12

-2.147

1M 1yr YTD

bsolute -11.3 -18.1 -18.1

el.to Nifty -7.6 -18.1 -18.1


omoters 66.7 64.1 64.1

I 11.0 13.2 13.6

I 15.4 15.3 15.6hers 6.9 7.4 6.7

Financials Rs, Cr

2011 2012 2013 2014E 2015ENII 10739 10734 13866 17734 21111

Total Income 42252 18237 22212 27035 30413

PPP 10950 10386 13199 16762 18856

Net Profit 6093 6465 8325 10658 11955

EPS 52.9 56.0 72.2 92.3 103.6

ICICI BANK

verage Daily Volume

11104

evious Target Price

arket Data

pside

358/127

SE Symbol

Healthy NII growth on the back of higher loan growth and margin expansion

During quarter, bank reported NII growth of 21.6% YoY to Rs.4256 cr on the back

higher than expected loan growth and loan yield led by credit deposits ratio a

expansion NIM. Other income registered growth of 26.5% YoY to Rs.2801 cr versRs.2166 cr in previous quarter and Rs.2215 Cr in last quarter in correspondi

quarter. Healthy NII along with higher support from other income, revenue of t

bank grew by 23.5% YoY to Rs.7057 Cr.

esult update ACCUMULATE

MP

arget Price

Bank’s profi t grow th of 12.6% YoY des pit e of 21.6% YoY gro wt h in NII an

28.6% growth in operat ing prof it was largely due to higher tax provision

mad e of ban k (32.4% of PBT vers us 27.9% of PBT in 2QFY14). Durin g quart eban k has created spec ial reserve for deferred tax liability to the tune of Rs.2

Cr as per recen t RBI gu ideli ne dated 20th Decemb er 2013. Ad jus tin g the sam

profit grew by 22% YoY whic h was quite impres sive. But bank’s cost of fun

increased high er than loan yield whic h would restr ict margin expan sion . W

low er ou r bo ok value estimates to Rs.643 from earlier of Rs.657. Ac co rdi ng

we reduc e our target pr ic e to Rs.1094 from earl ier of Rs.1118.

2wk Range H/L

hange from Previous

ICI Bank Vs Nifty


19.54 lakhs

fty 6073

ICICIBANK

Stable operating leverage led healthy operating profit growth

Operating leverage (opex to total assets) was remained very impressive and w

stable at 0.46% versus 0.43% in 3QFY13. Cost to income ratio of the bank improv

by 250 bps YoY to 37.4% as against 39.6%. Operating expenses increased

15.7% YoY in which employee cost and other operating expenses increased by 6

and 23% YoY respectively. Healthy revenue growth and controlled operati

expenses led operating profit growth of 28.6% YoY to Rs.4440 cr.

Asset quality by and large stable sequentially but provision declined

Bank reported deterioration in asset quality (GNPA) in sequential basis by 3.7%

absoluter term. In percentage to gross advance, GNPA stood at 3.07% versus 3.1

in previous quarter (marginally improved). Provisions were declined by 0.6% Qo

taking net NPA increased by 15.3% QoQ. In percentage to net advance, this ra

stood at 0.94% versus 0.85% in previous quarter. Lower provisions made PCR

70.1% versus 73.1% in previous quarter.

kt Capital (Rs Cr)



ock Performance

"ACCUMULATE"31th Jan, 2013




ICICI BANK

ank’s profit growth of 12.6% YoY despite of 21.6% YoY growth in NII and 28.6% growth

operating profit largely due to higher tax provisions made of bank (32.4% of PBT

rsus 27.9% of PBT in 2QFY14). During quarter, bank has created special reserve for

eferred tax liability to the tune of Rs.215 Cr as per recent RBI guideline dated 20th

ecember 2013. Adjusting the same, profit grew by 22% YoY which was quite

pressive. But bank’s cost of fund increased higher than loan yield would restrict margin

xpansion. We lower our book value estimates to Rs.643 from earlier of Rs.657.

ccordingly we reduce our target price to Rs.1094 from earlier of Rs.1118.


ower growth in deposits led by muted growth in term deposits

balance sheet front, bank’s deposits grew by 11% YoY lower than expectation largely

ue to lower growth in term deposits. Demand deposits and saving deposits grew by

3% and 11.8% YoY taking overall CASA deposits growth to 16% YoY. In percentage to

tal deposits, CASA stood at 42.9% versus 40.9% in last quarter. But in sequential

asis, bank reported 40 bps declined in CASA and borrowing also increased by 4%.

verall cost of fund was increased by 32 bps in sequential basis which restricted margin

xpansion despite of improvement in loan yield.

gher loan growth led by retail loan followed by overseas and corporate loan

oan grew by 16% YoY higher than expectation. Incremental loan growth came from

tail advances which grew by 22% YoY followed by oversea and corporate loan. Retail

an now constituted 39% of total loan versus 37% in last quarter. Retail loans are

enerally high yield in nature and higher loan constitute would result of margin sustainingcurrent level. We are susceptible about the margin improvement because of higher

st of fund as bank reported lower CASA and higher borrowing as a percentage to

DTL in sequential basis.

argin expansion marginally on account of higher cost of fund than deposits

NIM improved marginally from previous quarter to 3.32% from 3.31% largely due to

gher cost of fund than loan yield. Sequentially, cost of fund increased to 9.1% from

8% in previous quarter due to higher borrowing cost along with lower CASA ratio. Loan

eld improved to 9.9% from 9.7% in previous quarter. We believe NIM of the bank would

e highest as increasing cost of fund would cushion loan yield improvement.

aluation & View




ICICI BANK

Source: Company/Eastwind


hart Focus

NII growth on account of higher than expect

loan growth and margin expansion

Healthy revenue growth and impressive

operating leverage led operating profit

Despite of higher revenue grwoth and

operating profit growth, net profit muted

because of higher tax provisions against DTL




ICICI BANK

uarterly Result




arterly Result 3QFY14 2QFY14 3QFY13 % YoY % QoQ 3QFY14E Var iation

erest/discount on advances / bills 8224 7737 7066 16.4 6.3 7971 -3.1

ome on investments 2923 2839 2742 6.6 2.9 3012 3.0

erest on balances with Reserve Bank of India 34 47 136 -75.3 -28.5 52 55.8

hers 275 190 194 42.1 44.7 236 -14.1

al Interest Income 11456 10813 10138 13.0 5.9 11271 -1.6

hers Income 2801 2166 2215 26.5 29.3 2325 -17.0

al Income 14257 12980 12353 15.4 9.8 13597 -4.6

erest Expended 7200 6770 6639 8.4 6.4 6766 -6.0

4256 4044 3499 21.6 5.2 4505 5.9

her Income 2801 2166 2215 26.5 29.3 2325 -17.0

al Income 7057 6210 5714 23.5 13.6 6831 -3.2

ployee 997 872 941 6.0 14.4 0 -100.0

her Expenses 1620 1451 1321 22.7 11.7 0 -100.0

erating Expenses 2617 2322 2261 15.7 12.7 2596 -0.8

P( Rs Cr) 4440 3888 3452 28.6 14.2 4235 -4.6

visions 695 625 369 88.4 11.2 657 -5.4

T 3745 3263 3084 21.4 14.8 3578 -4.5

1212 911 834 45.4 33.1 1073 -11.5

t Profit 2533 2352 2250 12.6 7.7 2504 -1.1

ance Sheet

t Worth 74057 73103 67119 10.3 1.3 75608 2.1

posits 316970 309046 286418 10.7 2.6 318387 0.4

rowings 150940 145356 147149 2.6 3.8 153387 1.6

estment 171985 168829 166842 3.1 1.9 3012 -98.2

n 332632 317786 286766 16.0 4.7 328689 -1.2

et Quality

PA (Rs Cr) 10448 10078 9803 6.6 3.7

A (Rs Cr) 3121 2707 2185 42.8 15.3

GNPA 3.1 3.1 3.4

NPA 0.9 0.9 0.8

R(w/o technical write-off)(%) 70.1 73.1 77.7



ICICI BANK

nancials & Assuption




uarterly Result 2011 2012 2013 2014E 2015E

erest/discount on advances / bills 19098 22130 27341 31646 34992

come on investments 9181 9684 11009 11785 13220

erest on balances with Reserve Bank of India 469 491 543 184 184

hers 1334 1238 1182 946 946

tal Interest Income 30081 33543 40076 44561 49342

hers Income 31513 7503 8346 9302 9302

tal Income 61595 41045 48421 53863 58644

erest on deposits 11315 14304 16889 18217 20402

erest on RBI/Inter bank borrowings 1683 1469 2087 0 0

hers 6345 7035 7234 10146 11364

erest Expended 19343 22808 26209 27812 28840

10739 10734 13866 16749 20502

her Income 31513 7503 8346 9302 9302

tal Income 42252 18237 22212 26051 29804

mployee 4393 3515 3893 4451 5096

her Expenses 26910 4335 5120 5441 6229

perating Expenses 31302 7850 9013 9892 11325

P( Rs Cr) 10950 10386 13199 16159 18478ovisions 4631 1583 1803 2592 2853

T 0 8803 11397 13567 15626

x 0 2338 3071 4071 4688

t Profit 6093 6465 8325 9496 10938

lance Sheet

POSITS 259106 255500 292,614 321,875 360,500

posits Growth 7.3 -1.4 14.5 10.0 12.0

rrowings 125839 140165 145,341 158,535 177,560

rrowings Growth(%) 8.8 11.4 3.7 9.1 12.0

vestment 209653 159560 171,394 187,360 209,843

owth(%) 12.5 -23.9 7.4 9.3 12.0vances 256019 253728 290,249 339,592 380,343

owth(%) 13.4 -0.9 14.4 17.0 12.0

stwind Calculation

eld on Advances 7.5 8.7 9.4 9.3 9.2

eld on Investments 4.7 6.4 6.7 6.3 6.3

st of deposits 4.4 5.6 5.8 5.7 8.0

st of Borrowings 6.4 6.1 6.4 6.4 6.4

st of fund 5.0 5.8 6.0 0.0 5.9

aluation

ok Value 480 524 578 643 682

BV 2.3 1.7 1.5 1.6 1.5

E 5.5 7.3 9.4 9.2 10.6



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stock advisory for today - natural view on the stock jsw steel ltd, marico and buy heromotoco

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