INDUSIND_BANK_(IIB.IN):OW:_4QFY13_-_A_STEADY_SHIP-2013-04-19.pdf
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1、 abc Global Research 4QFY13 earnings at INR 3.07bn were in line with our estimates, driven partly by one- time expansion in margins as benefits of equity issuance trickled in. Steady loan growth and stable asset quality continued with steady uptick in CASA deposits. The markets reacted positively to
2、 the results with the stock closing c 7.2% above Tuesdays close. Key highlights: Loan book continued to grow at a steady 26% YoY with the retail wholesale mix also remaining stable at 51:49. CV segment, however, saw a meaningful slowdown in growth to just 2% QoQ and 21% YoY. After a modest H1FY13 on
3、 the CASA front, savings deposits built good traction with a 14% QoQ growth in Q4FY13 on the back of 16% QoQ in 3QFY13. CASA mix now stands at 29.3% vs. 28% at the end of H1FY13. Margins expanded 24bps QoQ to 3.7%, helped partly by substitution effect of equity issuance in 3QFY13, a fixed rate retai
4、l book and higher CASA ratio. As a result, cost of funds declined 48 bps QoQ vs just 24bps QoQ decline in yields on loans. Asset quality remained stable with GNPL at flat at 1.03% and NNPL at 0.31%. Earnings Outlook: We continue to expect a steady 28-30% loan book CAGR over the next two years. This
5、along with steady improvement in CASA and high fixed rate retail book will lead to further margin expansion, while asset quality should broadly remain stable. Overall we expect earnings outlook to remain robust with expectations of 34-35% EPS CAGR over FY14-15e. Valuations: IIB trades at 12-mth forw
6、ard multiples of 2.7x PB and 16.6x PE. With fundamentals continuing to remain impressive in the current tough macro environment and a quality top management, we continue to maintain our 12-mth target PE and PB at 15x and 3x, respectively, thereby, arriving at our target price at INR523 (INR504), imp
7、lying a potential return of 17%. We maintain our OW rating on the stock and believe that its superior growth, asset quality and profitability profile will act as supports for its premium multiples. Key downside risks: 1) Macro headwinds (2) Higher than expected slippages Overweight Target price (INR
8、) 523.00 Share price (INR) 450.10 Forecast dividend yield (%) 0.7 Potential return (%) 16.9 Note: Potential return equals the percentage difference between the current share price and the target price, plus the forecast dividend yield Mar 2012 a 2013 p 2014 e HSBC EPS 17.19 21.43 27.30 HSBC PE 26.2
9、21.0 16.5 Performance 1M 3M 12M Absolute (%) 8.4 7.2 30.2 Relative (%) 10.0 12.9 19.1 19 April 2013 Tejas Mehta* Analyst HSBC Securities CASA momentum also picks up Continue to expect margin expansion over the next two years, asset quality to remain stable Retain OW rating and roll forward target pr
10、ice to INR523 (INR504), implying potential returns of 17% 2 Indusind Bank (IIB IN) Commercial Banks 19 April 2013 abc Year to 3/2012a3/2013p 3/2014e3/2015e P momentum likely to be maintained in medium term -20% 0% 20% 40% 60% 80% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
11、3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Corporate loans y/y%Consumer loans y/y% Total loans y/y% 5% 10% 15% 20% 25% 30% 35% 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 Savings DepositsDemand Deposits CASA Source: Company data, HSBC Source: Company data, HSBC Margins rebound helped partly due to gains from equity raisi
12、ng and rest due to decline in funding costs as fixed rate book comes into play Core fee-income growth moderating slightly due to lower third party distribution fees, but balance sheet linked fees growing well 5% 7% 9% 11% 13% 15% 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13
13、1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Yield on advancesCost of deposits NIM (RHS) - 1.0 2.0 3.0 4.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 0% 20% 40% 60% 80% 100% Fee income (INR bn) Fee Income - YoY% (RHS) Source: Company data, HSBC Source:
14、Company data, HSBC Asset quality stable except for a large corporate account that was fully provided for during the quarter 12-month Rolling PE - PB - 1 2 3 4 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 - 20 40 60 80 Coverage (%) (RHS)Gross NPL
15、 (%) LLP/avg loans (%) 0x 10x 20x 30x 40x 50x Apr-99 Apr-01 Apr-03 Apr-05 Apr-07 Apr-09 Apr-11 Apr-13 0x 1x 2x 3x 4x Rolling P/EAvg 5 yr P/E Avg 2 yr P/ERolling P/B (RHS) Avg 5 yr P/B (RHS)Avg 2 yr P/B (RHS) Source: Company data, HSBC Source: Bloomberg, Company data, HSBC 4 Indusind Bank (IIB IN) Co
16、mmercial Banks 19 April 2013 abc Loan growth y/y: Retail division, CVs and 3Wheelers slowing down Loan growth y/y: Corporate loans -50% 0% 50% 100% 1QFY09 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 CVUV 2W3W Ca
17、rs Construction equipment -20% 0% 20% 40% 60% 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 Large corporateMid corporate Loan to small business Source: Company data, HSBC Source: Company data, HSBC Loan mix, yields Segment wise Gross NPL (Q4
18、FY13) 20% 30% 40% 50% 60% 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 10% 11% 12% 13% 14% 15% Corporate loans Consumer loans Yield on advances (RHS) - 0.5 1.0 1.5 2.0 2.5 3.0 3.5 CV UV Const. 3W 2W Cars Others CFD Corporate Gross NPL (%) Source: Company data, HSBC Source: Company dat
19、a, HSBC Slippages (annualised) ratio Gross NPL(%) Trends by loan type 0.5% 1.0% 1.5% 2.0% 2.5% 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 Slippages Ratio (annualized) - 1 2 3 4 5 6 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 - 2 4 6
20、 8 10 12 14 CVUVConst. Equip 3W2WCars CFDCorporateOthers (RHS) Source: Company data, HSBC Source: Company data, HSBC 5 Indusind Bank (IIB IN) Commercial Banks 19 April 2013 abc IndusInd Bank: 4Q and FY13 results summary (INR bn) Q413 y-o-y %q-o-q %FY13py-o-y % Income Statement Interest income 18.23
21、23%1%69.8330% Interest on Advances 14.62 22%0%56.1033% Income on Investments 3.31 23%2%12.8319% Interest on Balances with RBI see also the tables below. Under our research model, for stocks without a volatility indicator, the Neutral band is 5ppt above and below our hurdle rate for Indian stocks of
22、11%, or 6-16% around the current share price. Our target price of INR523 suggests a potential return, including dividend yield, of 17%, which is above the Neutral band. We therefore reiterate our Overweight rating on the stock. IndusInd: Valuations and risks summary (INR) PE multiple Weight 50% PE-b
23、ased TP PB multiple Weight 20% PB-based TP Weight 30% DCF value Weighted Target Price Downside risks New 15x 554 3.0x 585429523Macro headwinds; Higher than expected slippages and credit costs; Slower than expected margin expansion Old 15x 580 3.0x 596315504 Source: HSBC 8 Indusind Bank (IIB IN) Comm
24、ercial Banks 19 April 2013 abc Disclosure appendix Analyst Certification The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expr
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