Banking and NBFC Sector Results Preview

Q1FY16 Earnings Preview

Banks Loan Growth Continues in Single Digits
Loan growth remained weak in Q1FY16, due to continued slowdown in the economy impacting loan growth in
the corporate, SME and retail segments. Loan growth declined to 9.3% in Q1FY16 from 12.6% in Q4FY15.
Deposit growth also stood low at 11.4% in Q1FY16 as against 12.8% in Q4FY15. Going ahead, we expect 1-2
quarters to remain tough for growth and asset quality and banks should start growing their books in Q4FY16
once the economy starts reviving due to effective addressal of bottlenecks surrounding various projects and
full impact of interest rate cuts that will be felt in 3-6 months.
NIMs to be Largely Stable, Treasury Performance to be Weak
With lower wholesale lending rates as compared to last year and full impact of 15-20bps rate cuts by banks
done in mid Q1FY16 to take effect in Q2FY16, we expect NIMs of most banks to remain stable despite
Q1FY16 being a lean quarter. With rise in bond yields by 15bps QoQ, the treasury performance of banks is
expected to be weaker.
Asset Quality Stress to Remain at Elevated Levels for PSU Banks
Asset quality of most PSU banks is expected to be under pressure in Q1FY15 due to high exposure to troubled
sectors like infrastructure, real estate, textiles, iron and steel. With the special dispensation provided by RBI
for restructuring assets having ended on March 31, 2015, the slippages are expected to trend higher in case
of restructured assets coming out of moratorium. Some accounts where the CDR approval was pending as on
March 31, 2015 have been restructured in Q1FY16. In case of private banks where restructured assets are
lower, the slippage trend is expected to be stable. Axis Bank expects less stressed asset addition but the
performance of its restructured assets will be a key monitorable. Federal Bank is likely to see lesser slippages
in the corporate segment. With Central government and RBIs thrust on banks to improve their asset quality,
continued asset sales to ARCs (but in lower amount than previous quarters) will be another feature of this
quarter.
NBFCs Unlikely to See Escalation in Loan Growth
Most NBFCs are unlikely to see escalation in growth this quarter due to interest rates still being higher and
pressure on asset quality. NBFCs which are predominantly wholesale funded are expected to see some
improvement in their NIMs due to lower wholesale funding costs. In case of Bajaj Finance, NIM is expected to
decline on a YoY basis, as the company is expanding presence in low risk segments, but to improve on a QoQ
basis as Q1 is a peak season for the company. Asset quality will be a key monitorable, especially in the case
of power funding IFCs.
Sector View and Top Picks
Despite headwinds on the macro front and concerns surrounding bad assets, we still have a positive view on
the banking sector. On the valuation front, PSU banks are looking attractive (still at 50-70% discount from
their peak multiples achieved in 2007), and there is potential for upside in earnings if credit growth picks up
in the coming quarters, due to improvement in economy and improvement in the margins upon downward
repricing of deposit rates. However, asset quality improvement is expected to happen at a slow and gradual
pace and in the near term, the performance of restructured assets coming out of moratorium will be a key
monitorable. The recent announcement of capital infusion of ~Rs 600bn in PSU banks by the government in
next 2 years will be positive for PSU banks. From our coverage, we are positive on Federal Bank, Canara
Bank, Indian Bank, PNB and Bank of Baroda. In HFCs we like LIC Housing and GIC Housing. In IFCs,
we are positive on PFC and REC due to good loan growth v isibility with outstanding sanctions at 0.5-0.7x
current loan book and attractive valuations. We are also positive on IDFC due to expected growth after its
banking foray in October 2015.

Page 1

Quantum Securities
QS BFSI Coverage Universe
Company Name
Axis Bank
Allahabad Bank
BOB
BOI
Canara Bank
Federal Bank
Indian Bank
OBC
PNB
Vijaya Bank
Bajaj Finance
Can Fin Homes
Cholamandalam
GICHF
IDFC
Indiabulls Housing
LICHF
PFC
REC
Shriram City
Sundaram Fin
CARE
Source: QS Research

CMP
(Rs)
582
93
156
183
298
78
137
186
145
41
5103
770
705
220
156
633
462
262
286
1683
1567
1450

Target
(Rs)
620
115
230
265
520
90
285
300
195
55
5500
850
735
280
210
735
585
390
455
2365
1600
1750

Rating
Hold
Accum.
Buy
Buy
Buy
Accum.
Buy
Buy
Buy
Buy
Hold
Hold
Hold
Buy
Buy
Accum.
Buy
Buy
Buy
Buy
Hold
Accum.

P/ABV (x)
FY16E
FY17E
2.8
2.4
0.8
0.7
1.0
0.9
0.9
0.7
0.7
0.6
1.6
1.4
0.6
0.5
0.5
0.5
1.0
0.8
0.7
0.7
3.9
3.3
2.3
2.0
3.5
2.9
1.7
1.6
1.3
1.2
3.0
2.5
2.6
2.2
1.0
0.8
1.0
0.8
2.5
2.2
5.4
4.7
10.0
8.2

P/E (x)
FY16E
FY17E
15.6
13.1
5.7
3.7
8.2
6.2
6.2
5.0
4.7
3.8
11.0
9.1
4.4
3.0
7.6
6.3
7.0
5.9
6.2
4.4
25.1
20.4
15.7
11.6
18.3
13.2
9.4
7.6
13.6
11.5
9.6
7.8
13.3
10.6
4.9
4.1
4.6
3.9
16.5
13.3
33.4
28.9
25.2
20.6

RoAE (%)
FY16E
FY17E
18.5
19.0
7.7
10.8
10.3
12.5
6.1
7.1
9.6
11.2
14.7
15.5
9.7
12.8
5.1
6.9
9.5
10.7
9.3
12.1
18.1
17.1
15.6
18.5
17.5
20.7
18.2
20.5
10.2
11.1
32.9
34.0
20.6
21.8
20.4
20.7
22.4
22.5
15.4
16.7
16.5
16.9
42.8
43.6

RoAA (%) /
RoCE (%)
FY16E
FY17E
1.8
1.8
0.4
0.5
0.6
0.7
0.3
0.3
0.6
0.6
1.3
1.4
0.7
0.9
0.3
0.4
0.6
0.6
0.4
0.5
2.9
2.9
1.3
1.3
2.3
2.7
1.7
1.7
2.0
2.0
3.8
3.8
1.4
1.5
2.9
2.9
3.0
3.1
3.5
3.7
2.9
3.0
37.1
34.9

Q1FY16 Result Preview of Companies Under Coverage

Axis Bank Ltd
CMP Rs 582, Rating Hold, FY17E Target Rs 620
Loan growth is expected to be at 20.7% YoY despite decline in the system loan growth. NIM is expected to
see some compression due to seasonally weak quarter. Due to the banks exposure to troubled sectors like
infrastructure (power), textiles, iron and steel and metals being higher, asset quality will be a key
monitorable. We have estimated net profit to grow by 17.3% YoY to Rs 19.6bn. Treasury performance is
expected to be weaker as the bank has over 30% of investments in AFS.
Axis Bank (Rs mn)
Net Interest Income
Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

38574.9
20599.3
34980.8
19550.1
2782722.0
3192175.2

Q1FY15

33104.9
16910.5
28956.6
16667.6
2305351.6
2720042.3

%YoY
Change

16.5
21.8
20.8
17.3
20.7
17.4

Q4FY15

37992.4
26873.1
40128.8
21805.9
2810830.3
3224419.4

%QoQ
Change

1.5
-23.3
-12.8
-10.3
-1.0
-1.0

FY15

142241.4
83650.4
133854.4
73578.2
2810830.3
3224419.4

FY16E

168125.2
98624.4
158666.6
88493.3
3373586.6
3813522.0

FY17E

200312.5
114396.4
188193.3
105679.6
4119639.4
4579440.6

Allahabad Bank
CMP Rs 93, Rating Accumulate, FY17E Target Rs 115
Loans and Deposits are estimated to grow by 6.8% YoY and 4.5% YoY respectively. NIM is expected to see
some compression due to asset quality problem. Net profit is expected to increase by 39.1% YoY to Rs 1.6bn
on account of high base effect of last year.
Allahabad Bank
(Rs mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

15138.3
5375.7
11388.7
1568.4
1483780.7
1914898.1

Q1FY15

16096.6
4689.4
12195.3
1127.2
1389610.0
1832700.0

BFSI Sector Q1FY16 Results Preview

%YoY
Change

-6.0
14.6
-6.6
39.1
6.8
4.5

Q4FY15

14568.5
5658.6
10087.9
2026.3
1498768.4
1934240.5

%QoQ
Change

3.9
-5.0
12.9
-22.6
-1.0
-1.0

FY15

61778.8
19960.1
44597.1
6209.0
1498768.4
1934240.5

FY16E

68406.4
23560.2
50708.2
9305.4
1716555.7
2138855.8

FY17E

80828.1
27226.6
60901.4
14193.0
1989827.5
2460058.9

Page 2

Quantum Securities
Bank of Baroda
CMP Rs 156, Rating Buy, FY17E Target Rs 230
Loans and Deposits are estimated to grow by 8.8% YoY and 8.6% YoY respectively. NIM is estimated to
remain stable on a sequential basis. Asset quality is expected to be under stress. Net profit is expected to
decline by 37.8% YoY to Rs 8.5bn.
Bank of Baroda
(Rs mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

33556.4
11011.4
27635.8
8474.3
4152231.9
5990327.3

Q1FY15

33283.1
10245.4
24796.0
13618.8
3817720.0
5516490.0

%YoY
Change

0.8
7.5
11.5
-37.8
8.8
8.6

Q4FY15

31716.7
12954.6
26935.3
5983.5
4280651.4
6175595.2

%QoQ
Change

5.8
-15.0
2.6
41.6
-3.0
-3.0

FY15

131872.3
44020.0
99151.0
33984.3
4280651.4
6175595.2

FY16E

152034.0
50368.3
113996.4
42531.8
4879942.6
7040178.5

FY17E

188817.5
59036.9
145867.3
57697.9
5709532.8
8237008.9

Bank of India
CMP Rs 183, Rating Buy, FY17E Target Rs 265
Advances are expected to grow by 5.8% YoY. NIM is expected to decline on QoQ basis due to lower credit
growth and asset quality problem. Slippages are expected to be at Rs 50bn in Q1FY16 as against Rs 82bn in
Q4FY15. Net profit is estimated to decline by 87.3% YoY to Rs 1bn. Treasury performance is expected to be
weaker as the bank has 20% of investments in AFS and high AFS duration at 4.3.
Bank of India
(Rs mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

27700.3
12343.7
17167.0
1024.6
3980052.9
5265875.6

Q1FY15

26864.9
10244.7
20603.0
8056.9
3760157.7
5008754.9

%YoY
Change

3.1
20.5
-16.7
-87.3
5.8
5.1

Q4FY15

28462.9
11221.5
14265.5
-561.4
4020255.5
5319066.3

%QoQ
Change

-2.7
10.0
20.3
N.A
-1.0
-1.0

FY15

113436.6
42327.0
74877.7
17089.2
4020255.5
5319066.3

FY16E

132027.4
48676.1
87684.7
19738.1
4542888.7
6063735.6

FY17E

157908.5
55977.5
106914.3
24144.8
5269750.9
7033933.3

Canara Bank
CMP Rs 298, Rating Buy, FY17E Target Rs 520
Advances are expected to grow by 9.5% YoY. NIM is expected to be stable on QoQ basis. Slippages are
expected to remain high at Rs 28bn in Q1FY16. Net profit is expected to decline by 20% YoY to Rs 6.5bn. By
September 2015, Rs 150bn restructured assets are expected to be out of restructuring. As a result the
performance of these assets will be a key monitorable.
Canara Bank
(Rs mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

25301.9
12595.2
18245.7
6458.4
3316856.9
4762093.0

Q1FY15

24292.6
10269.0
17950.0
8068.6
3029640.6
4289761.6

%YoY
Change

4.2
22.7
1.6
-20.0
9.5
11.0

Q4FY15

24861.4
13258.1
17325.3
6129.6
3300355.1
4738401.0

%QoQ
Change

1.8
-5.0
5.3
5.4
0.5
0.5

FY15

96636.7
45502.5
69503.7
27026.3
3300355.1
4738401.0

FY16E

113979.8
53268.1
82851.2
32513.2
3762404.8
5413787.4

FY17E

136678.5
61331.9
100172.5
43120.3
4402013.6
6319899.0

Federal Bank Ltd

CMP Rs 78, Rating Accumulate, FY17E Target Rs 90
Credit and Deposits growth rate are expected to be 17.4% YoY and 18% YoY respectively. NIM is estimated
to decline on QoQ basis. Asset quality is expected to see some improvement, as corporate slippages are
expected to have stabilized. Net profit is estimated to grow by 14.2% YoY to Rs 2.5bn.
Federal Bank
(Rs mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

6059.0
2435.7
4066.1
2515.9
528235.4
729497.4

Q1FY15

5642.2
1565.4
3515.3
2202.3
450120.0
618150.0

BFSI Sector Q1FY16 Results Preview

%YoY
Change

7.4
55.6
15.7
14.2
17.4
18.0

Q4FY15

6232.3
3060.0
4691.5
2805.3
512849.9
708249.9

%QoQ
Change

-2.8
-20.4
-13.3
-10.3
3.0
3.0

FY15

23804.1
8783.1
16277.9
10057.5
512849.9
708249.9

FY16E

27538.9
10928.9
19605.1
12263.6
613340.1
846608.0

FY17E

32626.1
12927.6
23479.5
14723.6
739518.7
1018156.8

Page 3

Quantum Securities
Indian Bank Ltd
CMP Rs 138, Rating Buy, FY17E Target Rs 285
Credit and Deposits growth rate are expected to be 3.8% YoY and 5.7% YoY respectively. NIM is estimated
to decline on a QoQ basis. Overall asset quality will be under some stress due to some restructured assets
completing moratorium slipping into NPA. Net profit is estimated to decline by 3.3% YoY to Rs 2bn.
Indian Bank (Rs
mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

11019.4
3268.4
7430.0
2003.8
1220894.9
1641485.1

Q1FY15

10719.7
2152.4
6370.0
2071.6
1176530.0
1553360.0

%YoY
Change

2.8
51.9
16.6
-3.3
3.8
5.7

Q4FY15

11079.4
4541.2
8172.5
2061.6
1258654.6
1692252.7

%QoQ
Change

-0.5
-28.0
-9.1
-2.8
-3.0
-3.0

FY15

44612.9
13633.6
30137.2
10051.7
1258654.6
1692252.7

FY16E

50057.7
15876.1
34881.8
15005.5
1449593.9
1949842.2

FY17E

60920.0
18257.5
43787.8
21572.4
1681615.5
2265100.7

Oriental Bank of Commerce

CMP Rs 186, Rating Buy, FY17E Target Rs 300
Loans and Deposits growth is expected to be lower at 4.8% YoY and 7.2% YoY respectively. NIM is
estima ted to decline due to weak credit growth and asset quality problem. Due to the bank having higher
exposure to troubled sectors like aviation, power & electricity (SEBs), other infrastructure and real estate,
some slippages can be expected from these segments. Net profit is expected to decline by 79.9% YoY to
Rs 731.2mn in Q1FY16.
Oriental Bank (Rs
mn)
Net Interest Income
Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

Q1FY15

%YoY
Change

Q4FY15

%QoQ
Change

FY15

FY16E

FY17E

12348.6
5231.6
10266.8
731.2
1448981.5
1999295.1

12427.5
5882.0
11417.2
3645.4
1383140.0
1865470.0

-0.6
-11.1
-10.1
-79.9
4.8
7.2

12976.9
6285.3
12156.6
(1784.4)
1452613.0
2040097.0

-4.8
-16.8
-15.5
-141.0
-0.2
-2.0

50842.0
21214.0
42270.7
4970.8
1452613.0
2040097.0

58968.7
24670.9
49474.3
7398.9
1626298.3
2287847.9

69424.6
28461.2
58488.5
11439.5
1871845.7
2613351.3

Punjab National Bank

CMP Rs 145, Rating Buy, FY17E Target Rs 195
Loans and Deposits growth is expected to be at 8.4% YoY and 11.6% YoY respectively. NIM is estimated to
see some improvement on QoQ basis. Asset quality will be a key monitorable due to pressure being faced
with respect to exposures to troubled sectors like infrastructure, power and steel. Net profit is estimated to
decline by 67.6% YoY to Rs 4.6bn.
Punjab National
Bank (Rs mn)

Net Interest Income

Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

41359.0
15355.2
30996.1
4551.2
3767290.7
4963648.5

Q1FY15

43797.0
12364.4
31253.0
14051.2
3474852.8
4449201.4

%YoY
Change

-5.6
24.2
-0.8
-67.6
8.4
11.6

Q4FY15

37915.8
18051.3
32026.9
3065.6
3805344.1
5013786.4

%QoQ
Change

9.1
-14.9
-3.2
48.5
-1.0
-1.0

FY15

165555.7
58907.3
119547.5
30615.8
3805344.1
5013786.4

FY16E

185803.4
67914.6
137383.7
38599.3
4344231.5
5744265.4

FY17E

213935.9
76167.8
159604.9
47473.7
5107124.0
6732740.8

Vijaya Bank
CMP Rs 41, Rating Buy, FY17E Target Rs 55
Loans and Deposits growth is expected to be at 9.1% YoY and 4.3% YoY respectively. NIM is estimated to
show some improvement on a sequential basis due to improvement in the C/D ratio. Asset quality will be a
key monitorable. Net profit is estimated to decline by 51.4% YoY to Rs 785.3mn.

BFSI Sector Q1FY16 Results Preview

Page 4

Quantum Securities
Vijaya Bank
(Rs mn)
Net Interest Income
Non Interest Income
Operating Profit
Net Profit
Advances
Deposits

Q1FY16

Q1FY15

%YoY
Change

Q4FY15

%QoQ
Change

FY15

FY16E

FY17E

6422.7
2409.9
2824.4
785.3
840949.8
1238164.8

5354.8
1662.0
2900.5
1614.6
770910.0
1186770.0

19.9
45.0
-2.6
-51.4
9.1
4.3

6233.0
2738.5
3123.5
968.0
866958.6
1263433.5

3.0
-12.0
-9.6
-18.9
-3.0
-2.0

22922.8
8789.6
12590.3
4394.1
866958.6
1263433.5

27565.8
10395.8
16138.8
6156.7
986462.0
1432873.1

32915.0
12202.8
20175.9
8791.5
1144587.5
1651098.5

Bajaj Finance Ltd

CMP Rs 5103, Rating Hold, FY17E Target Rs 5500
Loans and Borrowings growth is estimated to be strong at 27.8% YoY and 24.9% YoY respectively due to
Q1FY16 being a peak season for consumer durables. However, disbursements in the auto segment are
expected to decline on a YoY basis. NIM is estimated to show improvement on sequential basis due to
subvention income on consumer durables being booked upfront. Asset quality will be a key monitorable in
the auto, construction equipment and infrastructure finance segments. Net profit is estimated to grow by
18.3% YoY to Rs 2.5bn.
Bajaj Finance
(Rs mn)

Net Interest Income

Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

9086.4
50.0
4968.3
2500.7
327589.5
264825.0

Q1FY15

7439.7
23.5
4035.2
2113.6
256420.0
212100.0

%YoY
Change

22.1
112.8
23.1
18.3
27.8
24.9

Q4FY15

8176.2
156.2
4583.1
2309.8
311990.0
247500.0

%QoQ
Change

11.1
-68.0
8.4
8.3
5.0
7.0

FY15

26518.4
5180.9
17415.0
8978.7
311994.5
247500.0

FY16E

34281.7
6217.1
22115.7
10838.5
391347.1
310065.0

FY17E

42636.0
7460.5
27603.0
13562.1
490103.4
388371.3

Can Fin Homes Ltd

CMP Rs 771, Rating Hold, FY17E Target Rs 850
Loans and Borrowings growth is expected to be at 40% YoY and 38.5% YoY respectively. NIM is expected to
improve on a sequential basis due to decline in funding costs. Asset quality is expected to remain
comfortable. Net profit is expected to grow by 24% YoY to Rs 235.1mn.
Can Fin Homes
(Rs mn)

Net Interest Income

Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

629.9
438.3
235.1
88959.6
79650.0

Q1FY15

423.9
311.0
189.6
63546.0
57509.2

%YoY
Change

48.6
40.9
24.0
40.0
38.5

Q4FY15

592.6
432.9
228.9
82370.0
73750.0

%QoQ
Change

6.3
1.2
2.7
8.0
8.0

FY15

1774.1
1494.5
862.4
82370.0
73750.0

FY16E

2544.0
2185.2
1308.9
111459.5
100890.0

FY17E

3355.2
2927.1
1768.7
148839.1
136891.1

Cholamandalam Investment and Finance Ltd

CMP Rs 696, Rating Hold, FY17E Target Rs 735
Loans and Borrowings growth is expected to be at 9.6% YoY and 5.1% YoY respectively. Growth in most
auto segments except tractors is expected to remain weak. NIM is expected to improve on a sequential basis
due to decline in funding costs. Asset quality is expected to show some stress due to weak industry scenario
and recent shift to 150 day provisioning. Net profit is expected to grow by 37.1% YoY to Rs 1.3bn.
Cholamandalam
(Rs mn)

Net Interest Income

Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

4680.4
43.2
2720.3
1276.3
262160.8
200594.6

Q1FY15

3843.9
93.0
2215.9
931.0
239107.0
190853.0

BFSI Sector Q1FY16 Results Preview

%YoY
Change

21.8
-53.5
22.8
37.1
9.6
5.1

Q4FY15

4497.6
21.3
2614.9
1356.4
254525.0
194752.0

%QoQ
Change

4.1
102.8
4.0
-5.9
3.0
3.0

FY15

13972.9
3335.1
9819.4
4351.6
221835.4
194752.0

FY16E

17677.0
3957.0
13456.0
6000.9
264858.7
232497.0

FY17E

21481.9
4711.6
17280.3
8328.1
319370.3
278884.4

Page 5

Quantum Securities
GIC Housing Finance Ltd
CMP Rs 220, Rating Buy, FY17E Target Rs 280
Loans and Borrowings growth is expected to be at 21.9% YoY and 22.2% YoY respectively. NIM is expected
to decline on a sequential basis. Asset quality is expected to remain comfortable. Net profit is expected to
grow by 9% YoY to Rs 276.3mn.
GIC Housing
(Rs mn)

Net Interest Income

Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

596.4
433.7
276.3
67299.0
59098.8

Q1FY15

517.8
412.4
253.6
55217.9
48343.3

%YoY
Change

15.2
5.2
9.0
21.9
22.2

Q4FY15

626.7
426.7
266.6
65979.4
57940.0

%QoQ
Change

-4.8
1.7
3.6
2.0
2.0

FY15

1702.3
1659.8
1029.6
65979.4
57940.0

FY16E

2154.3
2151.3
1263.9
79851.4
70588.8

FY17E

2619.6
2644.7
1556.7
96789.4
86116.4

IDFC Ltd
CMP Rs 156, Rating Buy, FY17E Target Rs 210
Loans are expected to decline by 1. 8% YoY as sanctions in the infrastructure sector still remain weak and as
the company is in the process of transforming itself into a bank. NIM is estimated to decline on YoY basis as
the company is replacing some of its medium term borrowings to long term borrowings in order to be able to
meet the banking norms. Asset quality will be a key monitorable especially in case of loans given to the
power segment. Net profit is estimated to decline by 10.5% YoY to Rs 4.3bn.
IDFC Consolidated
(Rs mn)
Net Interest Income
Non Interest Income
Operating Profit
Net Profit
Infrastructure Loans
Borrowings

Q1FY16

6994.5
2650.0
7658.7
4312.9
513784.6
649269.6

Q1FY15

6820.0
2038.8
8320.8
4817.4
523000.0
568140.0

%YoY
Change

2.6
30.0
-8.0
-10.5
-1.8
14.3

Q4FY15

6420.0
4565.6
8399.9
3822.1
524270.0
662520.0

%QoQ
Change

8.9
-42.0
-8.8
12.8
-2.0
-2.0

FY15

26330.0
14317.2
33595.2
17069.5
524270.0
662520.0

FY16E

28427.0
17221.5
37141.5
18360.3
576697.0
761898.0

FY17E

31123.6
20741.4
41894.4
21582.1
674735.5
899039.6

Indiabulls Housing Finance Ltd

CMP Rs 633, Rating Accumulate, FY17E Target Rs 735
Loans and Borrowings growth is expected to be at 26.8% YoY and 31.7% YoY respectively. NIM is estimated
to be stable on a sequential basis. Asset quality also is expected to remain stable on a sequential basis. Net
profit is estimated to grow by 14.3% YoY to Rs 4.7bn.
Indiabulls Housing
(Rs mn)
Net Interest Income
Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

6645.0
2298.2
8113.4
4710.4
532797.0
498613.5

Q1FY15

4046.3
2279.5
5819.4
4122.1
420140.0
378640.0

%YoY
Change

64.2
0.8
39.4
14.3
26.8
31.7

Q4FY15

6511.0
2321.4
8669.9
5269.3
522350.0
474870.0

%QoQ
Change

2.1
-1.0
-6.4
-10.6
2.0
5.0

FY15

20897.0
12241.5
28445.6
19782.3
442171.0
474870.0

FY16E

25704.0
15301.9
35318.3
24186.9
557400.8
590784.9

FY17E

31569.9
19127.3
43682.9
29600.9
682349.8
729317.9

LIC Housing Finance Ltd

CMP Rs 462, Rating Buy, FY17E Target Rs 585
Loans and Borrowings growth is expected to be at 18.7% YoY and 17.6% YoY respectively. NIM is expected
to see some decline on a QoQ basis due to lean season. Asset quality is expected to remain comfortable with
no big ticket NPAs expected to be added during Q1FY16. Net profit is estimated to grow by 13% YoY to
Rs 3.6bn.

BFSI Sector Q1FY16 Results Preview

Page 6

Quantum Securities
LIC Housing
(Rs mn)
Net Interest Income
Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

Q1FY15

%YoY
Change

Q4FY15

%QoQ
Change

FY15

FY16E

FY17E

6314.2
278.2
5838.2
3640.9
1110697.5
975124.7

5062.3
344.6
4973.2
3223.1
936094.5
828890.0

24.7
-19.3
17.4
13.0
18.7
17.6

6498.2
281.0
5856.1
3781.8
1083607.3
965470.0

-2.8
-1.0
-0.3
-3.7
2.5
1.0

22364.3
2519.8
21091.9
13861.9
1083607.3
965470.0

27919.9
2829.8
26115.4
17530.8
1303819.0
1150840.2

36107.5
3192.1
33489.2
22042.0
1586964.7
1383311.9

Power Finance Corporation Ltd

CMP - Rs 262, Rating Buy, FY17E Target Rs 390
Loan growth is expected to remain healthy at 14.8% YoY. NIM is expected to be stable on QoQ basis and
asset quality will be a key monitorable. Net profit is estimated to grow by 10.1% YoY to Rs 15.9bn.
PFC (Rs mn)
Net Interest Income
Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

Q1FY15

%YoY
Change

Q4FY15

%QoQ
Change

FY15

FY16E

FY17E

24467.6
799.2
24713.1
15943.0
2240414.8
1915284.6

21913.0
699.0
22070.3
14482.6
1951910.0
1640810.0

11.7
14.3
12.0
10.1
14.8
16.7

24424.7
714.9
24898.4
15607.6
2175160.0
1877730.0

0.2
11.8
-0.7
2.1
3.0
2.0

97036.1
788.0
95652.3
59593.3
2175160.0
1877730.0

111850.2
906.2
110259.4
71240.1
2505053.4
2182537.1

131654.6
1087.4
129831.8
84856.3
2987836.0
2596303.2

Rural Electrification Corporation Ltd

CMP Rs 285, Rating Buy, FY17E Target Rs 455
Loan growth is estimated to remain at 20.4% YoY. NIM and asset quality are expected to remain stable on
sequential basis. Net profit is estimated to grow by 6.7% YoY to Rs 13.7bn.

REC (Rs mn)

Net Interest Income

Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

22570.8
798.3
21956.5
13684.7
1868328.8
1555547.2

Q1FY15

18958.1
586.0
18960.7
12827.9
1552340.0
1307470.0

%YoY
Change

19.1
36.2
15.8
6.7
20.4
19.0

Q4FY15

22002.8
775.0
21321.2
10965.0
1796470.0
1510240.0

%QoQ
Change

2.6
3.0
3.0
24.8
4.0
3.0

FY15

82274.7
3159.7
82300.0
52598.7
1796470.0
1510240.0

FY16E

97803.3
3633.7
97749.8
60889.2
2130444.5
1784170.1

FY17E

116660.3
4360.4
116648.9
72706.4
2564325.8
2138279.6

Shriram City Union Finance Ltd

CMP Rs 1688, Rating Buy, FY17E Target Rs 2365
Loan growth is estimated to remain at 13.5% YoY. NIM is estimated to remain stable on a sequential basis.
Asset quality is expected to see some stress in the auto and SME segments and also due to recent shift in
provisioning to 150 DPD. Net profit is estimated to grow by 5% YoY to Rs 1.3bn.
Shriram City
(Rs mn)

Net Interest Income

Other Income
Operating Profit
Net Profit
Advances
Borrowings

Q1FY16

5584.4
150.0
3280.6
1341.2
170513.4
121539.6

Q1FY15

5001.2
126.2
3104.9
1277.2
150280.0
118090.0

%YoY
Change

11.7
18.9
5.7
5.0
13.5
2.9

Q4FY15

5617.1
92.1
3313.3
1496.0
167170.0
124020.0

%QoQ
Change

-0.6
62.9
-1.0
-10.3
2.0
-2.0

FY15

20685.9
1198.9
12948.9
5580.6
158902.9
124020.0

FY16E

24756.5
1492.6
16225.4
6736.8
189112.7
145227.4

FY17E

29519.9
1855.6
19914.8
8345.1
227695.0
175029.4

Sundaram Finance Ltd

CMP Rs 1565, Rating Hold, FY17E Target Rs 1600
Loans and Borrowings growth is expected to remain low at 9% YoY and 5.7% YoY respectively. NIM is
estimated to be stable on a sequential basis. Asset quality will be a key monitorable, especially in case of
loans given to the CV segment. Net profit is estimated to decrease by 10.5% YoY to Rs 1.1bn.

BFSI Sector Q1FY16 Results Preview

Page 7

Quantum Securities
Sundaram Finance
(Rs mn)

Q1FY16

Q1FY15

%YoY
Change

Q4FY15

%QoQ
Change

FY15

FY16E

FY17E

Net Interest Income

Other Income
Operating Profit
Net Profit
Advances
Borrowings

2806.7
256.3
1924.1
1094.2
143430.6
136558.2

2640.7
380.1
1911.2
1222.4
131528.8
129240.9

6.3
-32.6
0.7
-10.5
9.0
5.7

2758.2
102.5
1710.6
906.8
139253.0
132580.8

1.8
150.0
12.5
20.7
3.0
3.0

10870.9
1144.1
7487.1
4541.4
139253.0
132580.8

12331.7
1321.2
8566.1
5207.1
155963.3
147164.7

14109.5
1526.8
9912.3
6021.5
179357.8
169239.4

Credit Analysis and Research Ltd

CMP Rs 1450, Rating Accumulate, FY17E Target Rs 1750
Income from operations is expected to grow by 12.2% YoY, which will be mostly on account of income from
fresh ratings, as surveillance income normally is better in Q2 and Q3 of any fiscal year. Operating profit is
expected to grow by 17.6% YoY. Net profit is estimated to dec line by 8.8% YoY to Rs 242.3mn due to high
base of other income last year.
CARE (Rs mn)
Income from
Operations
Operating Profit
Other Income
Net Profit

Q1FY16

Q1FY15

%YoY
Change

Q4FY15

%QoQ
Change

FY15

FY16E

FY17E

478.7
236.2
88.0
242.3

426.8
200.9
148.4
265.8

12.2
17.6
-40.7
-8.8

778.5
520.0
32.0
350.9

-38.5
-54.6
175.0
-30.9

2572.1
1620.7
435.6
1403.3

3031.6
1885.5
522.7
1666.7

3642.7
2225.4
653.4
2005.8

Analyst: Rati J. Pandit, CFA

+91-22-40287021
Email: rati@qsmail.com
Date: July 13, 2015
Disclaimer: Quantum Securities Pvt. Ltd. (QSPL) offers discount and full service brokerage services and is not involved in any investment banking or merchant
banking activities. This document is based on information obtained from sources believed to be reliable and due diligence has been conducted to that effect. We do not
have any other material conflict of interest at the time of publication of the research report. Opinions & theories expressed are based on present circumstances &
judgment and are subject to change without notice. Quantum Securities Pvt. Ltd. accepts no liability whatsoever for any direct or consequential loss arising from any
use of this document or further communication given in relation to this document.
If annualized returns are greater than 15% , then the stock is rated as BUY, between a range of 10-15% is rated as Accumulate. If annualized returns are lower than 15%, then the stock is rated as SELL and between a range of -10% to -15% is rated as Reduce. In the range of +/ (- ) 10%, the stock is rated as Hold. However,
within this zone we may choose to give an Accumulate, Reduce or Hold rating.
Quantum Securities Pvt. Ltd. does not have any financial interest in the subject company and has not been engaged in market making activity for the subject
company; QSPL or any of its associates have not received any compensation or other benefits from th e subject company or third party in connection with the research
report or any other compensation from the subject company in the past twelve months. Further, Rati J. Pandit , CFA has not served as an officer, director or employee
of the subject company; QSPL does not have actual/beneficial ownership of one per cent or more of securities of the subject company, at the end of the month
immediately preceding the date of publication of the research report.

BFSI Sector Q1FY16 Results Preview

Page 8