MOSL: MOrning India (6/October/22): 1. Preview 2QFY23 (a. Financials; b. NBFCs; c. Automobiles; d. Consumer); 2. India Strategy (The Eagle Eye); 3. HDFC Bank; 4. Bajaj Finance
MOrning India (6/October/22): 1. Preview 2QFY23 (a. Financials; b. NBFCs; c. Automobiles; d. Consumer); 2. India Strategy (The Eagle Eye); 3. HDFC Bank; 4. Bajaj Finance
Today’s top research Idea
Financials | Banks and Insurance: Earnings progression on track amidst volatile macro
- Earnings are likely to remain healthy, led by higher business growth, NIM expansion, and a sustained reduction in credit cost. Margins to witness positive bias in near term, supported by pick up in loans growth and rising interest rates as floating rate loan portfolio gets repriced. However, we remain watchful of a rise in cost of funds to assess the margin impact over the medium term.
- Overall, we expect our Banking Coverage Universe to deliver ~41% YoY growth in PAT in 2QFY23, while PPoP to grow at a modest ~13% YoY. We estimate Private Banks to report a PPoP growth of ~13% YoY (+13% QoQ) and PAT growth of ~53% YoY (+8.7% QoQ) in 2QFY23.
- We estimate ICICIBC to deliver a loan growth of ~23% YoY over 2QFY23 and KMB/AXSB to grow by ~25%/18%. HDFCB/IIB reported a strong growth of ~23%/~18% YoY. We forecast NII growth of ~20% YoY, with KMB ~28%, AXSB ~23%, ICICIBC ~22%, IIB ~18%, and HDFCB at 16% in 2QFY23.
- PSBs are likely to deliver a NII/PPoP growth of 14%/12% YoY (+6.6%/+24.9% QoQ), while PAT will grow by ~26% YoY (+39.5% QoQ) in 2QFY23. Top picks: ICICIBC, SBIN, IIB, FB and SBI Life.
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Piping hot news
Auto sector to witness the best festive season of the decade, says FADA
With the coming 24 days of festivities in October, the Federation of Automobile Dealers Associations (FADA) is sure that October would see auto retail on high grounds. According to the statement in Vehicle Retail Data for September 2022 report, Dealers anticipated October to be the best festive in a decade for the passenger vehicle (PV) segment as it is expected to have even higher sales during the month
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