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MOSL: Morning India (22/March/19): 1. NBFC (Analyzing the deposit franchise); 2. Maruti Suzuki (Toyota to get two more products from the alliance); 3. Vodafone Idea (Tiding over liquidity crisis); 4. Telecom; 5

MOrning India (22/March/19): 1. NBFC (Analyzing the deposit franchise); 2. Maruti Suzuki (Toyota to get two more products from the alliance); 3. Vodafone Idea (Tiding over liquidity crisis); 4. Telecom; 5. Real Estate – GST

 

Today’s top research idea

Financials – NBFC: Analyzing the deposit franchise for NBFCs; BAF, PNBHF outperform peers on deposit front

• We analyzed the deposit trends of some leading NBFCs. Over the past four years, BAF has outperformed peers, with a CAGR of 87% in the number of depositors (accounts) and 145% in deposits.
• PNBHF and SHTF have also performed well, with a deposit CAGR of 64%/37%. HDFC has been treading steadily, and its depositor base of nearly 2m is ~14x of the next largest competitor. Only MMFS has witnessed a steady reduction in its depositor base and dependence on deposits - the number of accounts declined from 210k in FY14 to 130k in FY18.
• BAF has the highest average ticket size at INR0.75m followed by HDFC at INR0.50m and MMFS at INR0.24m. Also, we note that the interest rate differential between the companies increases along with the tenor of the deposit.

Piping hot news

Passenger growth story hits air pocket, dips to 53-month low

• Domestic air passenger growth has lost the high double-digit momentum seen till recently, with a growth of 5.62% in February — a 53-month low — with airlines flying 11.34 million passengers compared to 10.74 million, according to DGCA data released on Wednesday. The last time such a low growth was reported was in July 2014 when incremental traffic grew 7.19%, while in August 2014, the same was at 8%. Since September 2014, the market has been clipping at double-digits which lasted till December 2018. In January 2019, the growth rate slipped to 9.1%.