EUR 120.00 For Business Accounts Only

MOSL: Morning India (30/January/19): 1. Axis Bank (Well begun is half done); 2. HDFC (Business on track); 3. Bajaj Finance (Strong growth); 4. HCL Tech; 5. Godrej Consumer; 6. Bank of Baroda; 7. Shriram Trans.

MOrning India (30/January/19):

Today’s top research idea

• Axis Bank: Well begun is half done – earnings momentum set to accelerate
  AXSB under the leadership of a new CEO reported highest profit in the past 11 quarters at INR16.81b, led by steady NII growth (+18% YoY; 3% beat), controlled opex and healthy recoveries/treasury gains (INR10b/INR3.8b). NIM expanded 11bp QoQ to 3.47%.
• Fresh slippages moderated to INR37.5b (FY18 quarterly average: INR83.5b), which, coupled with healthy upgrade/recoveries/write-backs, enabled a QoQ decline in GNPL/NNPL ratios by 21bp/18bp (+47bp/-20bp YoY) to 5.8%/2.4%.
• PCR improved 145bp QoQ to 60.4% (75% including TWO). BB and below pool declined 14% QoQ to INR76.5b (1.6% of loans).
• AXSB disclosed its FY20-22 strategy – it aims to deliver 18% RoE over medium term. With a capable management team and an improving outlook on credit cost/margins, the bank is likely to deliver earnings acceleration over coming years. AXSB has already increased PCR to 75%, which will curb incremental provisioning requirement. We raise our SOTP-based TP to INR775, which corresponds to 2.5x Sep’20E ABV for standalone bank. Maintain Buy.
•  Piping hot news
  NCLT dismisses Ruias' proposal to settle Essar debt
  India’s dedicated insolvency court on Tuesday rejected the offer by Essar Steel promoters to pay off the company’s outstanding debt and extricate the alloy-maker from bankruptcy administration. It said that there was no irregularity in the lenders’ decision to accept the rival bid by ArcelorMittal. Essar’s promoters, the Ruias, had offered to pay Rs 54,389 crore to settle the matter outside the ambit of the Insolvency and Bankruptcy Code (IBC) as it wanted to “redeem the debt”.