EUR 120.00 For Business Accounts Only

MOSL: Morning India (27/February/20): 1. Federal Bank (Asset quality turning better; RoA expansion to continue); 2. Hindustan Unilever; 3. Cholamandalam Inv. & Fin.; 4. Mahindra CIE

Morning India (27/February/20):

Today’s top research idea
Federal Bank: Asset quality turning better; RoA expansion to continue
We attended Federal Bank (FB) Analyst Day, wherein the bank discussed the recent trends and opportunities, along with the key levers for RoA expansion.

** FB has identified new revenue streams such as micro finance, credit card, CV/CE and business banking for margin expansion.

** The bank reiterated that there is no residual stress in corporate accounts above INR1b. It thus expects the slippage trend to moderate significantly, which in turn will drive controlled credit cost.

** Work is happening to improve productivity by adding branches in a calibrated manner and a high focus is placed on leveraging the distribution channel through the RM model. This will drive a further improvement in the C/I ratio.

** FB has guided for an exit RoA of 1.25% by FY21. Overall, the bank is aiming to increase RoA by 25-30bp over the next 2-3 years.

Piping hot news
Vodafone Idea asks DoT for 15 years to pay AGR dues
Vodafone Idea has called on the government to allow it to pay adjusted gross revenue (AGR) dues over 15 years. The telecom company has also asked for a tax refund, cuts in licence fees and spectrum usage charges (SUC) and the establishment of a floor for tariffs among measures to help remain viable.