EUR 120.00 For Business Accounts Only

MOSL: Morning India (13/May/20): 1. Bandhan Bank (Liability franchise strong; Credit cost to stay elevated); 2. Nestle India; 3. Havells India; 4. Vedanta; 5. Godrej Agrovet; 6. Blue Star; 7. Utilities; 8. EcoS

MOrning India (13/May/20): 1. Bandhan Bank (Liability franchise strong; Credit cost to stay elevated); 2. Nestle India; 3. Havells India; 4. Vedanta; 5. Godrej Agrovet; 6. Blue Star; 7. Utilities; 8. EcoScope

 

Today’s top research Idea

Bandhan Bank: Liability franchise strong; Credit cost to stay elevated

• Bandhan has created higher than the required provisions toward COVID-19, which affected earnings, even as NII/PPoP growth held strong. Also, business growth was steady despite lockdown imposed in the last few days of Mar'20. On the asset quality front, higher write-offs have aided GNPA improvement.
• As of April'20, 100% moratorium had been availed in MFI, 13% in Mortgage, 35% in MSME, and 59% in NBFC-MFI in portfolio terms. Further, management indicated 78% of the portfolio remains in the Green zone, while only ~6% is in the Red zone.
• We overall remain watchful of asset quality and expect credit cost trends to remain elevated in the near term even though management commentary has provided comfort. We maintain our Buy rating, with an unchanged TP of INR350 (2.6x FY22E).

Piping hot news

Big bang economic package from PM Modi puts the country in reset mode

Prime Minister Narendra Modi on Tuesday announced a ₹20 trillion ($265 billion) stimulus package, in one of the world’s most aggressive bailouts in relation to economic size, equating to about 10% of gross domestic product (GDP). The stimulus is aimed at softening the devastating fallout of the coronavirus lockdown that has rendered millions of people jobless and pushed thousands of businesses to the brink of bankruptcy as the economy has suddenly gone idle. The fiscal package, details of which will be announced by finance minister Nirmala Sitharaman starting Wednesday, also aims to build an India based on self-reliance, Modi said in a televised speech on Tuesday evening.