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  • 1. BFSI Q4’11 Preview Eye on FutureAnalyst: Abhisek SasmalMail: asasmal@microsec.inPhone: 91-033-3051-2175 91 033 3051 2175 4th April ’2011
  • 2. Contents Page Numbers P N b Macro Economic Trend During Q4’11 2-3 Policy Actions – step towards future 4-7 Banking Sector – Long Term Budget Impact 8 Banking Sector Outlook 9 Q4’11 Preview 10-11 Valuation Matrix 12 Notes 13 4th April ’2011
  • 3. Macro Economic Scenario During Q4’11 RBI Continues with its rate hikes. We expect another 50 bps hike in CY2011 Higher base of last year is expected to take care of the price rise in commodities 10% 12% 9% Inflation Trend (y-o-y %) 10% 8% 7% 8% 6% 6% 5% 4% 4% 2% 3% 0% 2% -2% CRR Repo Rate Reverse Repo Source: Bloomberg, Mi S Bl b Microsec R Research h30 Higher deposit mobilization from Q4’11 brings some sanity Liquidity pressure easing out from Dec’10 levels as govt started to incremental C/D ratio 1000 using its ideal cash with RBI25 800 60020 40015 200 010 -200 5 -400 -600 0 -800 -1000 -1200 Credit Growth% Deposit Growth% Source: Bloomberg, Microsec Research 2 4th April ’2011
  • 4. Macro Economic Scenario During Q4’11 Rise in short term CD rates indicates tight liquidity situation 18 which persists for last 6 months 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 1-Jan-08 1-Mar-08 1-May-08 1-Mar-09 1-May-09 1-Mar-10 1-May-10 1-Jul-08 1-Sep-08 1-Nov-08 1-Jan-09 1-Jul-09 1-Sep-09 1-Nov-09 1-Jan-10 1-Jul-10 1-Sep-10 1-Nov-10 1-Jan-11 1-Mar-11 2-Jan-08 2-Mar-08 2-May-08 2-Mar-09 2-May-09 2-Mar-10 2-May-10 2-Jul-08 2-Sep-08 2-Nov-08 2-Jan-09 2-Jul-09 2-Sep-09 2-Nov-09 2-Jan-10 2-Jul-10 2-Sep-10 2-Nov-10 2-Jan-11 CD 3month CD 6month CD 12month CP 3month CP 6month CP 12 month Source: Bloomberg, Mi S Bl b Microsec R Research h Lower than expected borrowing programme for FY12 is expected to calm down the bond yields Government Bond Yield Curve (%)5 604 50 9.00 40 8.003 30 7.002 6.00 201 5.00 10 4.000 0 3.00 FY06 FY07 FY08 FY09 FY10 FY11 FY12E Central Govt Net Market Borrowing (INR Tn) 4/1/2010 3/1/2011 Banks share in Govt O/S Bonds(%) RHS Source: Bloomberg, Microsec Research 3 4th April ’2011
  • 5. Policy Actions – step towards futureBanking Laws (Amendment ) Bill 2011The proposed Banking Laws (Amendment) Bill 2011 proposes aligning the voting rights in private banks in proportion to the shareholding and raisethe ceiling in public sector banks from 1% to 10%.Under existing rules, the voting rights of a shareholder are capped at 1% in nationalized banks and10% in private banks, irrespective of the equity stake. Besides, it enables nationalized banks to increase or decrease their authorized capital withapproval from the central government and Reserve Bank, without being limited by the ceiling of a maximum of INR 3Bn. It also proposes to givepowers to the nationalized banks to issue two additional instruments -bonus shares and rights issues for accessing the capital market to raise capitalrequired for expansion of banking business.In our view, if approved, the amendments are going to be a positive trigger specially for PSU banks & small private sector banks. For PSU banks, it will be pp g g p gg p y pmuch easier to access the capital market. It will also help them to increase their capital base to support their business growth.Small Private banks like Dhanalaxmi bank, South Indian Bank, Laxmi villas bank, Federal bank, Karur Vysya bank, City Union Bank may show suddenspurt in interest from the investor community because these banks do not have single promoter or very low promoter holding (less than 12%). Groups whoare interested in getting banking license may show interest in these banks to get a indirect route of entering into the banking space. Even the NBFCs willalso try to acquire old private sector b k to ki k l i ld i banking business with an existing set-up. W b li banks kick-start b ki b i ih i i We believe these amendments are j the prelude of the h d just h l d f hmuch anticipated Banking license bill. We also anticipate some amendment in the Banking Merger & Acquisition rules before the govt proceed with newbanking licenses.Capital Infusion in PSBsCapital infusion proposed by GOI in its recent Capital Infusion Programme, is going to benefit the PSU banks in long term. However, the RoE may dilute abit in near term due to higher capital base, but this capital is going to support an average 20% credit growth for the below mentioned (next page) banks inyears to come. Increase of core tier 1 capital is a big positive as it will increase the loss absorbing capacity of banks. On 14th September’10, Basel Committeefor Banking Supervision (BCBS) had recommended the minimum core Tier-1 (common stock + retained earnings + pref. stock – deferred tax assets –securitization exposure) capital requirement of at least 4 5% until 2015 An additional 2 5% capital conservation is expected to be in place by 2019 4.5% 2015. 2.5% 2019.Usually, Indian PSU banks has larger proportion of lower quality capital due to perpetual debt component in tier 1capital. This infusion will take care ofthat too. 4 4th April ’2011
  • 6. Policy Actions – step towards future ….RBI’s Working group suggestions towards Si l policy rate, fi d policy corridor etc ’ ki i d Single li fixed li idWe believe the single rate mechanism will put our Banking System at par with global practices as this is also a Standard International Monetary practice.The Bank Rate which will be the rate at which the Reserve Bank will provide liquidity under a new collateralized Exceptional Standing Facility (ESF) isrecommended as the upper bound of the rate corridor and banks can dip into an additional 1% of their deposits, if they fall short of statutory liquidity ratio(SLR),(SLR) to borrow from the Central Bank at this rate This would tend to keep call rates anchored around the repo rate We believe this facility will provide rate. rate.some safety against unanticipated liquidity shocks. One of the recommendation is that on a daily basis too, banks are currently required to meet at least 70%of their CRR needs, which has been raised to 80%. This will put some additional pressure on banks. Inclusion of oil bonds under the list of collateral forreverse repo auction was also recommended. However, this can be debatable, as the fertilizer bonds are also then liable to be included in that list. Banking laws Amendment bill, if passed may see some activities in highlighted counters Govt’s capital infusion (Expected, subject to change) Promoter and Promoter Foreign Institutional Investors Govt Pre- Post Company Name Group % % Govt Holding Increase Issue Issue Axis Bank Ltd. 37.35 36.56 Capital Holding (Post in Net- Tier1 Tier-1 Issuance (Pre-Issue) Issue) Dilution worth Capital Capital City Union Bank Ltd. 0.00* 17.04 Banks (Rs Mn) (%) (%) (%) (%) % % Development Credit Bank Ltd. 23.08 8.27 Allahabad 2,920 55 56 2.9 3.7 8.12 8.69 Andhra 6,180 52 55 8.5 11.5 7.81 9.59 Dhanalakshmi Bank Ltd. 0.00* 39.78 Bank of Federal Bank Ltd. 0.00* 38.34 Baroda 32,809 54 58 9.9 18.2 8.22 11.03 Bank of HDFC Bank Ltd. 23.40 29.37 India 10,100 64 66 4.1 6.2 8.29 9.25 ICICI Bank Ltd. 0.00 39.23 Bank of Ms t a Mshtra 3,5 0 3,520 77 79 11.9 .9 11.3 .3 5.68 7. 3 7.43 IndusInd Bank Ltd. 19.57 36.93 Corporation 3,083 57 59 3.3 4.5 9.03 9.73 ING Vysya Bank Ltd. 43.40 23.86 Dena 5,621 51 58 16.9 18.4 7.40 10.24 Jammu & Kashmir Bank Ltd. 53.17 22.62 IOB 10,540 61 66 13.7 12.9 8.36 10.35 Karnataka Bank Ltd. 0.00* 29.98 OBC 17,400 51 58 16.5 18.5 8.02 10.88 PNB 1,841 58 58 0.5 0.9 8.38 8.52 Karur Vysya Bank Ltd. 3.51 21.43 y Syndicate Kotak Mahindra Bank Ltd. 45.61 23.99 Bank 6,330 66 69 9.8 9.9 7.70 9.23 UCO 9,400 64 68 14.4 19.7 6.06 9.10 Lakshmi Vilas Bank Ltd. 10.99 6.55 Union Bank 10,960 55 58 6.1 9.2 7.68 9.10 South Indian Bank Ltd. 0.00* 38.61 United Bank 3,080 84 85 8.8 8.2 8.30 9.57 Yes Bank Ltd. 26.60 45.60 Vijaya 3,680 54 58 9.0 12.3 7.28 9.18 * Indicates that management control is with institutions Prices as on 21st March’11 March 11 Source: GOI, Company, Bloomberg, Microsec Research 5 4th April ’2011
  • 7. Policy Actions – step towards future ….Increase of CAR for deposit taking NBFCsI f f d i ki NBFCThe Reserve Bank of India (RBI) has raised the minimum capital adequacy ratio (CAR) for deposit-taking Non-Banking Financial Companies (NBFCs)from 12 per cent to 15 per cent, effective from March 31, 2012. It expects that tightening of prudential norms will provide a cushion to these NBFCsin times of stress. Non-deposit taking NBFCs are already required to maintain a CAR of 15 per cent. This means for these NBFCs to give Rs 100 asloans, they should have a capital base (equity + d b ) of Rs 15.l h h ld h i lb ( i debt) f R 15Scrappage policy, if implemented can be a big boost for BanksTaking a cue from the US and European Union, India too may come out with its own version of the ‘cash for clunkers’ programme. In what couldbe boost f automakers and a d li h f green activists, the government i considering a scrappage policy f old vehicles, as suggested b theb ab for k d delight for i i h is id i li for ld hi l d by hSociety of Indian Automobile Manufacturers (SIAM), the auto industry body. The scrappage policy, if gets implemented, would be revenue positivefor the government despite the concessions doled out. Not only that, it can be big boost for Indian Banks who are focused on their auto loanportfolio. Incremental business generate on the back of the Scrappage policy can contribute 1% to 3% to the outstanding book. NBFC CAR (%) As on Auto finance Disbursements INR Bn FY07 FY08 FY09 FY10 Reliance Cap 28.0 Mar-10 Indiabulls 27.1 Jun-10 Cars 270 294 245 304 STFC 23.0 Jun-10 Growth% 8.9% -16.7% 24.1% BAFL 23.0 Mar-10 Utility Vehicles 95 102 78 105 Manap.Gen 22.1 Jun-10 SREI Infra. 22.0 Mar-10 Growth% 7.4% -23.5% 34.6% REC 21.0 Jun-10 Commercial Vehicles 302 286 194 232 IDFC 20.5 Mar-10 Growth% -5.3% -32.2% 19.6% Aditya Bir. Nuv. 17.9 Jun-10 MMFSL 17.4 17 4 Jun-10 J 10 Two-Wheelers Two Wheelers 145 112 76 71 PFC 17.2 Jun-10 Growth% -22.8% -32.1% -6.6% IFCI 17.0 Jun-10 Total 811 794 593 712 Sundaram Fin. 16.9 Mar-10 LIC Housing 14.9 Jun-10 Growth% ‐2.1% ‐25.3% 20.1% Source: ACE Equity, Microsec Research 6 4th April ’2011
  • 8. Policy Actions – step towards future ….New banking licensesThe Reserve Bank of India(RBI) had put up a discussion paper on issuing New Banking Licenses in August, 2010.According to the norms earlier promulgated, the possibility for Industrial Houses to be allotted with Banking Licenses looked remote. However, the RBImay allow the Corporate Houses to bid for Banking Licenses but with a strict shareholding which may limit their influence on the decision making withrespect to large size financing. Also, Industrial Houses with rural focus may be given a chance to set up banks. If big corporate houses are allowed to enterthe banking space, the banking industry would then slowly but surely move from a regime of ‘large number of small banks’ to ‘small number of largebanks’. The new era is going to be one of consolidation around identifying core competencies where even the big banks would want to acquire smallerones to gain scale against probable new entrants.Insurance Bill 2011There were flurry of activities relating to Insurance sector. First, it was Japanese Insurance company Nippon Life Insurance which had acquired a 26%stake in Reliance Capital’s subsidiary Reliance Life Insurance, valuing it at INR 11,500 crore. Despite falling New Business Achieved Profit (NBAP)margins of insurers due to new IRDA pricing norms, the deal values Reliance Life at 16 times the new business premium. This shows foreign partner’sconfidence i the I fid in h Insurance sectors’ revival i f ’ i l in future. Thi also ensures a fl This l floor valuation f other Lif I l i for h Life Insurance players whose valuation i at a nadir. l h l i is diSecond, Buffetts Berkshire Hathaway entered the Indian non-life insurance sector as a corporate agent of Bajaj Allianz General. Even he was quite vocalin his meetings with IRDA chief for increasing FDI limit in this capital intensive sector to 49%. Focus on rural area could be the theme for new banking licenses Branches B h % of rural f l As on 3/31/2010 Rural to total State Bank Group 5,915 34.33 Nationalized banks 13,652 32.82 Private sector 340 6.69 State Bank of India S B k f I di 4,678 4 678 37.61 37 61 Punjab National Bank 1,947 41.31 ICICI Bank 151 8.89 HDFC BANK 95 5.5 Axis Bank 44 4.55 7 4th April ’2011
  • 9. Banking Sector – Long Term Budget ImpactNational Manufacturing Policy“ For sustained growth of GDP and productive employment for younger generation, it is imperative that the growth in manufacturing sectorpicks up. We expect to take the share of manufacturing in GDP from about 16 percent to 25 percent over a period of ten years” – FMThis means on a assumed growth of 8% in GDP, the manufacturing sector will grow at CAGR of 15%. This growth is at least 500-600 bpshigher than the average growth the sector has registered in the last two years. With core manufacturing constitutes a big chunk (~17-20%) ofbank’s loan book, we expect this as a long term positive for banking sector too.Bharat Nirman“ In pursuance of my earlier budget announcement to provide a real wage of INR100 per day, the Government has decided to index the wagerates notified under the MGNREGA to the Consumer Price Index for Agricultural Labor” – FM“I am happy to announce an increase in the remuneration of Anganwadi workers from INR1,500 per month to INR3,000 per month and for INR1 500 INR3 000Anganwadi helpers from `750 per month to INR1,500 per month.” – FMThis means for 21 Mn employees under MGNREGA scheme & 2.2 Mn Anganwadi workers and helpers will now get much higherwages, which not only increase their consumption but also encourage them for savings.Investment Environment“Currently, only FIIs and sub-accounts registered with the SEBI and NRIs are allowed to invest in mutual fund schemes. To liberalize theportfolio investment route, it has been decided to permit SEBI registered Mutual Funds to accept subscriptions from foreign investors whomeet the KYC requirements for equity schemes This would enable Indian Mutual Funds to have direct access to foreign investors.” – FM schemes.With un-official figure of USD 150 Bn to USD 1 Tln of black money lying in tax heavens and foreign bank accounts, this step may force someof it to convert into white money in coming years. This also helps banks with AMC operations. 8 4th April ’2011
  • 10. Banking Sector – OutlookThe outlook for the banking sector in coming quarter (Q411) appears positive on the back of expected growth in credit and business earnings duringthe busy seasons. However the main risk to our optimism remains the inflation which may force RBI to continue with its interest rate tighteningcycle. Crude in that case may prove to be the main spoilsport if disruption in supply happens over prolonged agitation and tension in Middle-eastcountries.On the positive side, we are still bullish on the future prospect of the banking sector in the long run. We believe, banks would benefit in a risingGDP growth scenario. We are anticipating a credit growth of 18% for CY2011 with more focus on non-infra loans. Deposit growth which had been alaggard till now, may see some revival going forward due to recent deposit hikes which makes the real interest rates turning positive. Current tightliquidity , higher CD ratio and new base rate regime have given banks the required pricing power to pass on most of the increase in cost of funds tothe end borrowers.On the negative side, Net interest margin is likely to be under pressure in near term. We expect margins across the board to be lower by 10-15 bpsdue to a steep rise in short term interest rates. The impending pension liability may become a near term overhang on the whole PSU bank lot.However, for banks with strong CASA base may see 5-7 bps margin erosion from the multiyear high levels. On the asset quality front,Implementation of CBS for computation of NPA may throw some negative surprises for PSU banks. Private banks with strong reporting structure area better bet in that case. Private Sector Banks FY08 FY09 FY10 FY11E FY12E Public Sector Banks FY08 FY09 FY10 FY11E FY12E NIMs% 2.76 2.98 2.9 3.3 3.20 NIMs% 2.2 2.2 2.14 2.48 2.33 C/I ratio 51.33 49.42 48.94 46.5 44.8 C/I ratio 55 53 54.2 48 46.3 NNPA % 0.9 1.22 1.48 1.05 0.95 NNPA % 0.9 0.75 1.1 1 1.15 Source: ACE Equity, Microsec Research 9 4th April ’2011
  • 11. Q4’11 PreviewPrivate Banks Q411E Q410 Q311 YoY% QoQ% Commnets NII 29849.1 23514 27767 26.9% 7.5% Share of CASA may come down a bit for this quarter as hike in term deposits Total Income 40891 32549 39045 25.6% 4.7% rates are quite sharp. Loan growth to remain strong with more focus on HDFC B k Net Profit Bank 11521 8366.3 10878.8 37.7% 5.9% corporate b k With 95 b hik i b t book. bps hike in base rates (D i Q411) it shows good t (During Q411), h d pricing power in tight liquidity situation. NIMs to remain almost flat. Fee NIM% 4.18 4.4 4.2 - 23 bps - 2 bps income to show good growth. NNPA% 0.2 0.3 0.2 - 10bps 0 bps NII 18580.1 14600.7 17331.1 27.3% 7.2% Total Income 31156.93 23936 28809 30.2% 8.1% Axis bank can surprise on its fee income growth this quarter. However, NIMs may come down a bit due to Axiss high share of bulk deposit (40%) in overall Axis Bank Net Profit 9598 7648.7 8913.6 25.5% 7.7% deposits. Lower slippage and higher recoveries and write off can boost bottomline. NIM% 3.78 4.09 3.81 - 31 bps - 3bps NNPA% 0.25 0.36 0.29 -11 bps - 4 bpsPublic Banks Q411E Q410 Q311 YoY% QoQ% Commnets NII 12004.7 8204 11301.8 46.3% 6.2% Loan growth to remain strong in this quarter too. 50 bps hike in base rates may Total Income 15345.6 11024 14813.9 39.2% 3.6% help the bank to contain the margin pressure to only 8 bps (QoQ). Higher IOB Net Profit 2320 1274.4 2316.6 82.0% 0.1% recoveries and upgrades may show in asset quality improvement. However, higher provisions for 2nd pension option liability can put some pressure on NIM% 3.19 2.73 3.27 46bps -8 bps bottomline. NNPA% 1.43 2.52 1.51 -109 bps -8 bps NII 11141 7601 12040 46.6% -7.5% Total Income 15304.8 15304 8 13072.5 13072 5 16512.3 16512 3 17.1% 17 1% -7 3% 7.3% Loan growth to moderate a bit Due to lower CASA base and higher proportion bit. of bulk deposits, the NIMs can come under pressure. With higher exposure to IDBI Bank Net Profit 3991 3184.1 4540.7 25.3% -12.1% the troublesome Real estate, MFI and telecom sector , the asset quality may show NIM% 2.07 1.4 2.2 67 bps - 13 bps some pressure this quarter too. NNPA% 1.22 1.02 1.2 20 bps 2 bps Source: ACE Equity, Microsec Research 10 4th April ’2011
  • 12. Q4’11 Preview continued….NBFCs Q4 11E Q411E Q4 10 Q410 Q3 11 Q311 YoY% QoQ% Commnets NII 3671.27 2980 3521.6 23.2% 4.3% Loan disbursements to grow strong boosted by resumption in disbursements for Total Income 4315 3469 5450.6 24.4% -20.8% builder loans, which had been stopped during Q311. LICHFL has fully provided LICHFL Net Profit 2893 2135* 2134.8 35.5% 35.5% for the dual rate schemes last quarter. If the clarification comes in favor of LICHFL, the reverse action will boost its bottom line. However, we havent build NIM% 2.95 2.4 3 55 bps - 5 bps that amount in to our model. NNPA% 0.23 0 23 0.34 0 34 0.2 02 - 11 bps 3 bps NII 1075.37 753 1039 42.8% 3.5% Higher than expected other income and lower tax outgo had boosted DHFLs earnings last quarter. We are not expecting any such things this quarter. Loan Total Income 1175.37 943 1243 24.6% -5.4% growth to remain strong this quarter too (25-30% YoY). The Company has set upDewan Housing Net Profit 560.83 417.5 617.8 34.3% -9.2% DHFL holdings Private limited, as a 100% subsidiary of the Company, which will Finance act a Special Purpose Vehicle (SPV) for acquiring and holding 67.56% equity stake p p ( ) q g g q y NIM% 2.76 3 2.85 -24 bps - 9bps of Deutsche Postbank Home Finance Ltd (DPHFL). This would boost their overall portfolio and add to the loan book from FY12. NIMs may come under some pressure due to higher dependence on bank borrowings. NNPA% 0.65 0.96 0.7 - 31 bps - 5 bps NII 352.37 272.7 337.2 29.2% 4.5% Loan book growth to remain above industry average at around 25% YoY. NIMs to Total Income 422.91 422 91 502.7 502 7 397.1 397 1 -15.9% -15 9% 6.5% 6 5% come under pressure as bank borrowing cost rises 40% of its source of funds rises.GRUH Finance Net Profit 185.05 328** 175.4 -43.6% 5.5% comes in the form of bank borrowing. However GRUH can pass some of it to the NIM% 3.5 3.95 3.63 - 45 bps -13 bps end borrower. Increasing focus on riskier segments like self employed can deteriorate its asset quality. Higher provisions may hurt the bottomline. NNPA% 0 0 0 - - NII 2817.10 1982 2561 42.1% 10.0% Loan book to grow at a healthy pace, mostly driven by its secured book. change in g yp , y y g Total Income 3171.03 2569 2847.8 23.4% 11.4% business mix , rising interest rates is expected to hurt margins to the tune of 10 bps Bajaj Finance Net Profit 893.30 252 763.5 254.5% 17.0% for this quarter. More focus on secured lending, help from Credit Bureau (CIBIL), NIM% 12.7 15 12.8 -230 bps -10 bps cleaning up of the legacy book would reduce NPA significantly going forward and would boost bottom-line due to lesser provisioning. NNPA% 1 2.2 1.1 -120 bps -10 bps NII 8607.2 8607 2 7278 8480 18.3% 18 3% 1.5% 1 5% Muted disbursements due to lower govt spending may result in a flat loan growth Total Income 9588 7998 9400 19.9% 2.0% for this quarter. REC may able to protect its margin this quarter due to lower REC Net Profit 6825.92 5611 6640 21.7% 2.8% dependence on bank loans (18%). Recent announcements of raising USD 1 Bn through ECB and USD 200 Mn by issuing offshore corporate bonds emphasize the NIM% 4.5 4.4 4.56 10 bps -6 bps demand visibility for the sector. NNPA% 0 0 0 0 0 * Net of extra provision and income from stake sell in LIC MF ** PAT Includes INR 230 Mn other income Source: ACE Equity, Microsec Research 11 4th April ’2011
  • 13. Valuation Matrix Particulars EPS BVPS P/E P/BV CMP Target FY10 FY11 E FY12E FY13E FY10 FY11 E FY12E FY13E FY10 FY11 E FY12E FY13E FY10 FY11 E FY12E FY13EBankex (TTM) 13299.0 700 812 923 1057 5134 5575 6015 6613 19.00 16.38 14.41 12.58 2.59 2.39 2.21 2.01Axis Bank 1403.0 1593 70 82 99 123.2 395.6 454 533 637 20.04 17.11 14.17 11.39 3.55 3.09 2.63 2.20HDFC Bank 2342.0 2596 65 80.4 107 139 448 521 607 721 36.03 29.13 21.89 16.85 5.23 4.50 3.86 3.25IOB 143.6 195 13 14.6 19.9 25 119.7 133 149.4 169.4 11.05 9.84 7.22 5.74 1.20 1.08 0.96 0.85IDBI 142.5 215 14.1 15 23.6 27.7 103.3 118.5 133.5 177.3 10.10 9.50 6.04 5.14 1.38 1.20 1.07 0.80REC 254.0 286 23.06 24.23 29.8 36.36 112.2 128.7 142.9 164.3 11.01 10.48 8.52 6.99 2.26 1.97 1.78 1.55LICHFL 225.0 210** 15.5 19.4 24.9 31.8 70.5 86.8 104.8 118.5 14.52 11.60 9.04 7.08 3.19 2.59 2.15 1.90GRUH Finance 360.2 450 18.6 22.5 27.9 31.8 75.8 95.34 119 141.6 19.37 16.01 12.91 11.33 4.75 3.78 3.03 2.54Dewan 268.1 356 19.8 27.06 37.02 48.13 106.2 127.1 155.8 185.6 13.54 9.91 7.24 5.57 2.52 2.11 1.72 1.44Bajaj Finance 699.0 1080 24.4 60.3 79.8 111.08 314.5 370 440 542 28.65 11.59 8.76 6.29 2.22 1.89 1.59 1.29Source: Bloomberg, ** Target achieved Prices as on 31st March’11 closingMicrosec Research 12 4th April ’2011
  • 14. Notes 13 4th April ’2011
  • 15. MICROSEC RESEARCH IS ALSO ACCESSIBLE ON BLOOMBERG AT <MCLI>Kolkata MumbaiInvestment Banking Brokerage and Wealth Management 74 A, Mittal Tower, 7th FloorAzimganj House, 2nd Floor Shivam Chambers, 1st Floor 210, Nariman Point, Mumbai – 400 021, India7, Camac Street, Kolkata – 700 017, India 53, Syed Amir Ali Avenue, Kolkata – 700 019, India Tel: 91 22 2285 5544, Fax: 91 22 2285 5548Tel: 91 33 2282 9330, Fax: 91 33 2282 9335 Tel: 91 33 3051 2000, Fax: 91 33 3051 2020 Email: info@microsec.in Website: www.microsec.in Disclaimer This document is prepared by the research team of Microsec Capital Ltd. (hereinafter referred as “MCL”) circulated for purely information purpose to the authorized recipient and should not be replicated or quoted or circulated to any person in any form. This document should not be interpreted as an Investment / taxation/ legal advice While the information contained in the report has been procured in good faith from sources considered to be reliable advice. faith, reliable, no statement in the report should be considered to be complete or accurate. Therefore, it should only be relied upon at one’s own risk. MCL is not soliciting any action based on the report. No indication is intended from the report that the transaction undertaken based on the information contained in this report will be profitable or that they will not result in losses. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advisors, as they believe necessary. We and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation discussed herein or act as advisor or lender I borrower to such company (ies) or have other potential conflict of interest with respect to any recommendation and related information and opinions. The same persons may have acted upon the information contained here. Neither the Firm, nor its directors, employees, agents, representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. 4th April ’2011
  • 16. 4th April ’2011