Emkay Global Financial Services has come with its September quarterly earning estimates for Banking and Financial Services sector. According to the research firm, top picks for the quarterly results - HDFC Bank, ICICI Bank and United bank in banking space. Mahindra Finance and CRISIL are our top picks in NBFC space.
Emkay Global Financial Services Q2FY13 result preview for banking and financial services sector:
NII growth for PSU banks under our coverage to grow by 9.5% yoy, but stronger 4% qoq driven by (1) sharp drop in the wholesale deposit costs and (2) reduction in cash reserve ratio (CRR). However, large part of benefit to be offset by (1) 25-50bps reduction in lending rates and (2) drop of 100bps in loan to deposit ratio (LDR). For private sector banks, growth to be strong at 22% yoy, highest being for ICICI Bank at 31%.
However, we expect the performance to be further muted at operating profit level. For PSU banks OP to grow by more modest 7% yoy and just 1% qoq led by weak performance of fee income (flat to decline yoy) and no help from treasury. Private banks to replicate strong NII performance into OP growth, 26% yoy and 3.3% qoq.
We expect slippages to moderate for PSU banks from 3.5% in Q1FY13 to 2.2% in Q2FY13 (but still nothing to rejoice). The lower ratio to be largely led by recoveries pertaining to slippages occurred in Q1FY13. The undercurrents in the real slippages to still remain high.
The benefits accruing from lower wholesale deposit rates may not repeat in the ensuing quarters. In fact, there may be negative surprises as the union govt, to overshoot the borrowing programme. On second key issue of slippages, as we highlighted the numbers are likely to remain steep in coming quarters.
Our top picks for the quarterly results - HDFC Bank, ICICI Bank and United bank in banking space. Mahindra Finance and CRISIL are our top picks in NBFC space.
| Company Name | Net Sales (Rs mn) | Growth (%) | APAT (Rs mn) | Growth (%) | ||||||
| Q1FY13 | Q4FY12 | Q1FY12 | YoY | QoQ | Q1FY13 | Q4FY12 | Q1FY12 | YoY | QoQ | |
| Allahabad Bank | 13695 | 13062 | 13182 | 4% | 5% | 3972 | 5143 | 4880 | -19% | -23% |
| Andhra Bank | 10008 | 9385 | 9512 | 5% | 7% | 3320 | 3618 | 3162 | 5% | -8% |
| Axis Bank | 23233 | 21799 | 20073 | 16% | 7% | 11211 | 11535 | 9203 | 22% | -3% |
| Bank of Baroda | 29326 | 27981 | 25669 | 14% | 5% | 12440 | 11494 | 11753 | 6% | 8% |
| Bank of India | 21405 | 20436 | 19039 | 12% | 5% | 7667 | 8875 | 4911 | 56% | -14% |
| Canara Bank | 18943 | 18435 | 19617 | -3% | 3% | 7569 | 7752 | 8522 | -11% | -2% |
| Corporation Bank | 8622 | 8083 | 7436 | 16% | 7% | 3276 | 3702 | 4011 | -18% | -11% |
| Dewan Housing | 1466 | 1398 | 1109 | 32% | 5% | 802 | 778 | 719 | 12% | 3% |
| Federal Bank | 5196 | 4916 | 4744 | 10% | 6% | 2259 | 1903 | 1912 | 18% | 19% |
| HDFC | 13762 | 12582 | 11636 | 18% | 9% | 10531 | 9872 | 9077 | 16% | 7% |
| HDFC Bank | 35551 | 34841 | 29445 | 21% | 2% | 15878 | 14174 | 11994 | 32% | 12% |
| ICICI Bank | 32942 | 31929 | 25064 | 31% | 3% | 19097 | 18151 | 15032 | 27% | 5% |
| LIC | 3995 | 3505 | 3341 | 20% | 14% | 2662 | 2278 | 2944 | -10% | 17% |
| M&M Financial Service | 12062 | 4876 | 3902 | 209% | 147% | 4769 | 1610 | 1355 | 252% | 196% |
| Manappuram General Fin | 4313 | 4169 | 3713 | 16% | 3% | 1780 | 1578 | 1353 | 32% | 13% |
| PNB | 38265 | 36951 | 34526 | 11% | 4% | 13804 | 12457 | 12050 | 15% | 11% |
| South Indian Bank | 3031 | 2968 | 2588 | 17% | 2% | 1191 | 1230 | 950 | 25% | -3% |
| SBI | 114335 | 111189 | 104219 | 10% | 3% | 34751 | 37516 | 28104 | 24% | -7% |
| Union Bank of India | 18626 | 18217 | 16612 | 12% | 2% | 6670 | 5124 | 3525 | 89% | 30% |
| United Bank of India | 7214 | 6836 | 6235 | 16% | 6% | 1887 | 1739 | 1248 | 51% | 9% |
| Yes Bank | 4987 | 4722 | 3856 | 29% | 6% | 3095 | 2901 | 2350 | 32% | 7% |
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