Updated: IndusInd Bank reported 4QFY10 net profit of Rs981mn (+11% qoq, +94% yoy). This was driven by 1) 89% growth in NII to Rs2.73bn (3% ahead of our estimate) on margin expansion (NIMs at 3.2%, +25bp qoq) and higher volumes (up 8% qoq, +30% yoy), and 2) noninterest income (i.e., net fee) which was 9% ahead of our estimate on thirdparty product distribution and recovery of NPAs of Rs181mn. Some of this was offset by higher loan loss provisions, as the bank accelerated provisions to meet RBI coverage requirement (more…)
Year: 2010
Explaining Inflation, Valuations and Deficit and Rise of Sensex
The Indian Inflation, Valuation and Deficit have all touched a high and Investors question the rising SENSEX amidst such a macro environment. We agree that Deficit is a cause of concern, however, lately Foreign Investors have turned a blind eye on the mis-represented and ever growing Indian Inflation, which is an accepted way of life. As said in one of our previous article, valuations get expensive when Investors see GROWTH ahead – paving way for P/E expansion.
Inflation – Nonfood, non-fuel inflation is currently at 4.9%. Historically, when this number has exceeded 10%, the market has always posted negative returns on a six-month forward basis. However, when the number is lower, (more…)
Indraprastha Gas – Growth Ahead – Buy
Indraprastha Gas Ltd is expected to thrive on the back of higher scope for penetration, sustaining conversion rate and price advantage. Volumes to double in next 5 years backed by low CNG penetration in Delhi (13% of three & four wheelers) and expansion into Noida and Ghaziabad markets. Will benefit from Increasing CNG variants being introduced by (more…)
Hindustan Sanitaryware – HSIL – Buy
Anand Rathi has initiated coverage on HSIL with a BUY Rating. HSIL leverages its strong brand and wide distribution network by selling
complementary products (in the bathroom and kitchen ‘solutions’ category) garnered through a strategic tie-up or manufactured by
it.
India’s largest sanitaryware player with a 40% market share, HSIL could (more…)
No Entry Load – No Agent Commission on ULIPs
High distributor commissions and upfront charges on insurance products appear to be the key areas of contention in the recent regulatory tussle between IRDA and SEBI. From media reports, the finance minister appears inclined towards a no-load model for all financial products over the long term.
We believe insurance companies will need to gradually reduce upfront distributor payouts or may even have to move close to a (more…)
Nitin Fire – Growth in All Segments
Nitin Fire Protection Industries Ltd – reported a strong 4QFY10 performance, with revenues more than doubling yoy (104%) to Rs1,054m, while earnings jumped 179% to Rs155m. Sales and earnings for FY10 grew 28% and 27%, respectively.
All the three business segments contributed to the 104% yoy revenue growth in 4QFY10. The fire-fighting business grew 46% yoy, (more…)