21 January 2019
Market snapshot
Equities - India
Sensex
Nifty-50
Nifty-M 100
Equities-Global
S&P 500
Nasdaq
FTSE 100
DAX
Hang Seng
Nikkei 225
Commodities
Brent (US$/Bbl)
Gold ($/OZ)
Cu (US$/MT)
Almn (US$/MT)
Currency
USD/INR
USD/EUR
USD/JPY
YIELD (%)
10 Yrs G-Sec
10 Yrs AAA Corp
Flows (USD b)
FIIs
DIIs
Volumes (INRb)
Cash
F&O
Note: *Average
Close
36,387
10,907
17,517
Close
2,671
7,157
6,968
11,206
10,637
20,666
Close
62
1,282
6,030
1,862
Close
71.2
1.1
109.8
Close
7.3
8.6
18-Jan
-0.02
0.00
18-Jan
309
5,133
Chg .%
0.0
0.0
-0.7
Chg .%
1.3
1.0
2.0
2.6
1.2
1.3
Chg .%
2.6
-0.8
1.1
1.0
Chg .%
0.2
-0.2
0.5
1MChg
0.45
0.03
MTD
-0.3
0.2
MTD*
287
8,839
CYTD.%
0.9
0.4
-1.5
CYTD.%
7.4
8.7
3.5
6.1
6.5
3.3
CYTD.%
19.6
0.1
0.7
0.3
CYTD.%
1.8
-0.7
-0.4
CYTDchg
-0.1
0.0
CY18
-4.6
15.9
CYTD*
287
8,839
Today’s top research idea
HDFC Bank: Steady performance continues
Contingent provisions to insulate earnings against any impending stress
We have seen some pickup in the investments in branches and calibration in
the workforce to maintain healthy deposit growth. The C/I of the bank is
continuously improving due to productivity from the existing investments.
The PPoP growth is expected to be healthy at 24%+ and PAT growth is
expected to be 23% over FY18-21E as the bank made contingent provisions
of INR3.2b to insulate itself against any stress in the agri portfolio.
Despite pricing pressure, NIMs moderation is expected to be limited as
high-yielding retail loans contribution continues to rise. HDFCB has been
consistently gaining market share across retail product segments and strong
capitalization and liquidity levels will enable it to sustain this growth
momentum over next few years. We maintain our
Buy
rating with TP of
INR2,500 (3.7x Sep-20E ABV of the bank).
Research covered
Cos/Sector
HDFC Bank
Wipro
L&T Infotech
NMDC
AU Small Finance
NIIT Technologies
Shilpa Medicare
Key Highlights
Steady performance continues; contingent provisions to insulate
earnings against any impending stress
Improving gradually on revenues, steadfastly on margins
Growth momentum intact; transient sluggishness in few top clients
Iron ore dispatches to grow even without Donimalai
Growth continues unabated; operating metrics to improve gradually
Healthy momentum; uptrend in deal wins continue
G-Gleevec to boost profitability
South Indian Bank One-off impairments drags overall performance
Results Expectation CRIN | HZ | KMB | LTFH | ZENT
Chart of the Day: HDFC Bank – Steady performance continues; contingent provisions to
insulate earnings against any impending stress
Share of retail loans (based on internal classification) stood at 68.1%
INRb
Car Loans
CV loans
2 wheeler loans
Sub-total - Auto Loans
Personal loans
Business banking
Loan against shares
Credit Cards
Home loans
Gold loans
Other Retail
Retail Total
Corporate and international
Total loans
3QFY18
825.1
425.5
92.2
1,342.9
674.9
1,008.1
34.6
336.2
381.3
53.0
497.6
4,328.6
1,983.6
6,312.1
2QFY19
919.2
495.5
112.9
1,527.6
841.5
1,170.4
35.8
405.4
478.8
57.0
580.9
5,097.2
2,411.1
7,508.4
3QFY19
930.2
528.8
113.7
1,572.7
895.5
1,204.3
34.6
448.4
518.0
57.6
587.5
5,318.6
2,491.0
7,809.5
YoY (%)
12.7
24.3
23.3
17.1
32.7
19.5
-0.1
33.4
35.8
8.7
18.1
22.9
25.6
23.7
QoQ (%)
1.2
6.7
0.7
3.0
6.4
2.9
-3.5
10.6
8.2
1.0
1.1
4.3
3.3
4.0
% of total
11.9
6.8
1.5
20.1
11.5
15.4
0.4
5.7
6.6
0.7
7.5
68.1
31.9
100.0
Source: Company, MOSL
Research Team (Gautam.Duggad@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.