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MOSL: Morning India (16/October/18): 1. IndusInd Bank; 2. Indiabulls Hsg. Fin.; 3. AU Small Finance; 4. Delta Corp; 5. Trident; 6. Financials; 7. Utilities; 8. Capital Goods; 9. Metals Weekly

MOrning India (16/October/18): 1. IndusInd Bank; 2. Indiabulls Hsg. Fin.; 3. AU Small Finance; 4. Delta Corp; 5. Trident; 6. Financials; 7. Utilities; 8. Capital Goods; 9. Metals Weekly

 

Today’s top research idea

IndusInd Bank: Operationally on track; asset quality overhang remains

• IIB reported 2QFY19 PAT at INR9.2b (5% YoY growth) affected by contingent provision of INR2.75b (towards infra group). NII rose 21% YoY, while the NIM moderated 8bp QoQ  driven by an increase in funding cost. Other income stood muted on account of weak treasury gains driven by robust growth in the core fee income .Controlled opex enabled 22% YoY growth in PPoP.
• Loan growth stood at 32% YoY led by robust growth in corporate segment. Asset quality remains largely stable with GNPA/NNPA increasing by 2.3%/3.3% QoQ. IIB has witnessed an unusual quarter as contingent provision significantly impacted earnings however it has not changed the way we look at IIB's underwriting capability.
• The core performance remains strong as reflected in robust loan growth, asset quality and better than estimated margins. Merger with BHAFIN will strengthen earnings profile and further boost return ratios.

Piping hot news

Trade deficit at 5-month low despite oil pressures

• India’s trade deficit narrowed to a five-month low at $13.98 billion in September despite higher oil prices, even as merchandise exports entered negative territory after a gap of six months. Data released by the commerce ministry on Monday showed that exports contracted 2.15% in September while imports grew 10.45% in dollar terms. In rupee terms, however, exports and imports expanded at 9.65% and 23.78%, respectively, mostly because of a sharp depreciation in the rupee.