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Wednesday, 17 January 2018


INDUSIND BANK LTD reported expected double digit growth with PAT growing at 25% YOY and 6% sequentially. PAT came at Rs. 9363 Mn in the current quarter compared to Rs. 7506 Mn corresponding quarter previous year. Net Interest Income, difference between interest earned and expended also maintained its double digit growth momentum rising 20% YOY at Rs. 18950 Mn against Rs.15780 Mn in Q3 FY17. Net Interest Margin (NIM) came a tad lower than its usual 4% level due to mild pressure on corporate side and was reported at 3.99% in December quarter FY18. Other income which accounts 22% of total income for the bank climbed 17% YOY & constant sequentially in Q3 FY18. Core fee maintained its growth momentum of 22% yearly & 6% sequentially at Rs. 10770 Mn. Gross NPAs and Net NPAs stood at 1.16 % and 0.46% in Q3 FY18 compared to 0.94% & 0.39% respectively same period previous year. GNPA ratio witnessed an uptick of about 22 basis points YOY and 8 basis points sequentially.  NNPA ratio was slower, moving up by 7 & 2 basis points YOY & quarterly respectively. One basis point is equal to 0.01%. Provisions & contingencies continued with their sequential improvement with a 20% decline, whereas on yearly basis, there was a jump of 9%. Provisions & Contingencies were reported at Rs. 2362 Mn against Rs. 2169 Mn same period previous year. With respect to segment revenue, double digit growth was evident in Retail, other banking business & treasury whereas Corporate slowed down to 2% YOY. Retail outpaced Corporate growing at 23% where as Other banking business was highest at 67% growth rate YOY. Treasury income grew at 11% YOY and declined 16% QOQ due to hardening of yields in the December quarter. CASA ratio stood at 42.90% rising 580 basis points YOY supported by savings accounts which jumped 1.7 times YOY. The Bank aims to achieve CASA ratio of about 45% by 2020. In absolute terms CASA rose 42% YOY at Rs. 626160 Mn against Rs. 441620 Mn corresponding period previous year. Advances grew at a higher rate of 25% & deposits at 23% YOY. The corporate loan book grew faster than retail in the current quarter, though retail income tends to be higher due to differential of about 5% between retail and corporate yields. IndusInd Bank is also witnessing strong traction through its digital initiatives in savings accounts, personal loans, credit cards & mobile banking business.

 IndusInd Bank has announced its merger with Bharat Financial on 14th October 2017. The bank has received approval from Competition Commission and is awaiting RBI nod. With double digit profitability growth, stable CASA, provisions reined in, credit growth above industry average, strong core fee, lower slippages & credit costs and Bharat Financial Inclusion in its stable, IndusInd Bank has fortified its position in private sector banking. Thus, we recommend BUY for the stock for medium and long term investment with target price of Rs.1925.

Monday, 1 January 2018


DABUR Ltd reported spectacular sequential growth for the September quarter FY18 with mild yearly numbers. Revenue or Income From Operations fell 1% YOY at Rs. 19589 Mn in the current quarter against Rs. 19816 Mn same period previous year. Sequential growth was reported at 9% in September quarter driven by 10% domestic & volume growth of 7.2% with international business growing at 3.9% in constant currency. Domestic & international business contributed 68% & 29% respectively in September quarter FY18. EBDITA grew 1% and stood at Rs. 5042 Mn against Rs. 4979 Mn corresponding quarter previous year. On quarterly basis EBDITA growth was 29% in Q2 FY18. Profit After Tax grew 37% QOQ at Rs. 3627 Mn against Rs. 3584 Mn corresponding quarter previous year with yearly growth of just 1%. Operating Expenditure declined 2% YOY from Rs. 15730 Mn in Q2 FY17 to Rs. 15390 Mn in the current September quarter. Other expenditure came fell from 12.1% of sales to 10.8% of sales on the back of cost synergies and declined 12% YOY.   On quarterly basis, operating expenditure jumped 4% QOQ in Q2 FY18. EBDITA margin expanded 394 basis points QOQ and 61 basis points yearly at 25.74% in the current quarter. Net Profit Margin too followed suit, rising 372 basis points sequentially and 43 basis points YOY. Net Profit Margin was reported at 18.51% against 18.08% same period previous quarter. Taxation was almost constant at Rs. 880 Mn where as finance costs declined 20% and were reported at Rs. 133 Mn YOY buttressing bottom-line. Depreciation on the other hand jumped 12% at Rs. 401 Mn in the current September quarter.  Other Income fell 6% YOY and rose 4% on quarterly basis. Other Income was reported at Rs. 843 Mn compared to Rs.893 Mn corresponding quarter previous year.

Dabur Ltd is one of the most trusted Indian brand world’s largest Ayurvedic and Natural Health Care Company. Dabur operates in key consumer product categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. The company has wide distribution network of about 6 million retail outlets in both urban and rural markets.  The company’s revenue basket is broadly divided into consumer care, food & retail business. Consumer care business contributing 82% of total revenues de-grew 2% YOY with positive sequential growth of 13% in the September quarter. Food business contributes the next business chunk of about 15% exhibiting 5% YOY growth. Retail business reported negative growth both yearly & sequentially. Consumer Care, Food & Retail revenues were reported at Rs 16147 Mn, Rs. 2828 M & Rs. 265 Mn respectively in September FY18. DABUR Ltd has weathered GST disruption and is expected to perform better with an uptick in the domestic rural economy and global growth. The company has collaborated with Amazon to increase its online and overseas presence and aims to double its ecom volumes which are currently about 1.5% of domestic sales. The company has improved its bottom-line in September quarter with strong volume growth of 7% without any beneficial restocking impact. With respect to product category, Real juices witnessed margin improvement with market share of 55% in Q2 FY18, Dabur Honey grew by 8.6% reversing the declining trend of previous quarters and oral care growth was around 23%. Dabur seems to have stabilized its business model and is expected to take competition head on in the coming quarters. We recommend BUY for the stock for medium & long term investment with target price of Rs. 550.

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