MOSL: Morning India (9/October/17): 1. 2QFY18 Preview (1a. Financials - Banks 1b. Technology) 2. GST 3. EcoScope 4. Granules India 5. Consumer Durables

​​MOrning India (9/October/17): 1. 2QFY18 Preview (1a. Financials - Banks; 1b. Technology); 2. GST; 3. EcoScope; 4. Granules India; 5. Consumer Durables

Today’s top research idea

Banks | Preview 2QFY18: Earnings to remain subdued

• We expect 2QFY18 to be another modest quarter characterized by - (a) tepid loan growth, (b) excess liquidity chasing quality credit (yield pressure), and, (c) elevated credit cost. We would watch for bank’s comments on NCLT referred cases and guidance on credit cost.
  
• We expect balance sheet clean-up for ICICIBC and AXSB to continue while estimate lower slippages for SBI. Mid-sized private banks would continue to outshine peers due to continued market share gains, stable asset quality and healthy earnings growth.
  
• We thus estimate private banks to report 18% y-y growth in earnings while our coverage universe will report 15% q-q growth (aided by benign base and stake sale gains). Top picks: HDFCB, ICICIBC and SBIN amongst large banks. We like YES and RBL amongst mid-size private banks.
  

Piping hot news

Kotak panel report can lead to change in promoters’ status

• The Kotak Panel’s proposal that the chairman of a company be non-executive could result in a change of status of prominent promoters even in those companies where the chairman and managing director post is already split between two individuals