*We lower our FY12-13e EPS for OBC ~2% on lower loan growth and margins. * ***Conservative credit growth. *Credit growth, at 14.1% yoy in 1QFY12, was significantly lower than that of the industry (19.9%). We believe that slower loan growth in the past four consecutive quarters was deliberate in order to protect NIM. We expect loan growth for FY12 to bounce back to ~18%.
*Capital infusion kept NIM stable. *In 1QFY12, NIM declined 4bps qoq to 2.94%. Capital infusion in 4QFY11 negated the higher margin contraction due to higher savings deposit rates and a ~100bps decline in credit-deposits and CASA share in the quarter. We expect NIM to be 2.8-2.9% over FY11-14. *Slippages high, but NPA coverage adequate. *NPA costs were higher due to higher slippages of Rs3.8bn and Rs1.4bn charged for the higher provisioning requirement of the RBI. NPA coverage (incl. technical write-offs) was 75% in Jun ’12. We expect credit costs to fall over FY12-13 as further slippages are likely to be low. *Key risks: continuing macro headwinds and thereby slower loan growth, margin contraction and higher NPA costs.* *Safe Harbor Statement:* *Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.* ** *Nothing in this article is, or should be construed as, investment advice.** * ** * * ** ** -- For Anything related with Stock market be Online at http://www.niftyviews.com/ Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234 FOR TRIAL STOCK/NIFTY/OPTION CALLS You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group. To post to this group, send an email to [email protected] To unsubscribe email [email protected] for more info visit http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB . This is Not a Spam Mail. Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture."
