Chola Wealth Direct Broker Research reports

NIM improved marginally by 12bpsYoY to 13.83% majorly led by a fall in cost of funds by 76bps YoY to 9.31%. Yield on assets fell by 40bps YoY to 20.64%. Going forward, interest income reversals on account of migration to NPA recognition on 90-dpd basis will keep...

Background: JK Lakshmi Cements (JKLC) is a north Indian Cement player, established in 1982. JKLC has clinker units in Sirohi, Rajasthan and grinding units in Rajasthan, Gujarat and Haryana. The current clinker capacity is 6.2 MTPA and cement capacity is 10.9 MTPA. JKLC derives sales volume from the northern and western regions. The company has market share of ~6-7% in the northern region and ~9-10% in western regions. JKLC is on the spree of capacity expansion; recently...

L&T; is India's largest infrastructure and EPC Company with presence across major verticals like Process, Hydrocarbons, Power, Core Infrastructure like Roads, Ports, Bridges, Industrial Structures etc, serving customers over 30 countries across the globe. Company's manufacturing footprint extends across eight countries in addition to India. Order book of INR 2.6tn provides visibility and is a mix of Private, Govt & International orders. Its Infra Development, Financial and Software subsidiaries...

Asset Quality deteriorated with GNPAs increasing sharply by 69bps QoQ to 4.27% and NNPAs increased by 32bps QoQ to 2.85%. This sharp increase was majorly on account of slippages from the corporate book. Outstanding restructured loans stands reduced to INR 8.1bn (1.91% of advances) vs. INR 8.4bn in 4QFY17. Total outstanding SDR loan accounts...

Asset quality deteriorated as GNPA increased by 29bps QoQ to 0.72% and NNPA increased by 24bps QoQ to 0.38% on account of higher NPAs in retail book and 3 project accounts turning NPAs (GNPA for project loans increased to 8.4% from 6.3%). Loan to Value...

Operating profit stood at INR1.99bn (growth of 58% YoY) which was largely driven by Cost/income improved significantly to 46.9% vs. 52.8% in 1QFY17. PAT grew marginally by 9%YoY to INR 661mn dragged by higher provisioning cost (219% YoY)....

Supreme Industries (SI) is a plastic product manufacturer and the largest plastic processor in India, processing over 0.28mn MT annually. Company has four business verticals i.e. Plastic Piping (52%), Packaging Products (21%), Industrial Products (19%) and Consumer Products (8%). SI has 22 manufacturing plants situated across India. Company enjoys a significant market share across its business verticals; Plastic Piping (9.48%), Indus trial Products (15%) and Consumer Products (13%). Supreme Industries is the market leader in the Packaging Products segments like XLPE (50%), EPE Foam (36%), Cap Cell ( 30%) and Air Bubble Film (18%). SI's...

Asset quality remained stable with GNPAs decreasing marginally to 5.03% of advances, while NNPA increased to 2.3% of advances (19bps QoQ). Despite such high write-offs of INR 24.6bn, the NPAs remained largely unchanged. Net slippages for the quarter remained at elevated levels at INR 32.1bn vs. 20.1bn in 4QFY17 on account of higher stress in Agri segment and slippage of INR 15bn+ outside watch-list. Up-gradations and recoveries were noted at INR 3.06bn Vs INR 28.04bn in 4QFY17. Management commented that stressed asset...

Dewan Housing Finance Corporation (DHFL) promoted by the Wadhwan group, commenced operations in 1984. DHFL with a total AUM of INR 882bn is the 3rd largest housing finance company with a market share of nearly~ 4% and operates through a network spread across in 351 locations. It is the only Housing Finance Company with focus on LMI customer segment. Distribution footprint is primarily spread across Tier II / III cities and outside the municipal limits...

Asset Quality improved sharply as GNPA contracted by 55bps QoQ to 0.97% and NNPA also contracted by 42bps to 0.39% in 1QFY18 as the bank recovered ~60% from one account classified as NPA in 4QFY17 in-line with the guidance (the balance amount is expected in due course). There...

Asset Quality improved with GNPA decreasing by 26bps QoQ to 7.21% and NNPA decreasing by 34bps QoQ to 4.05%. Absolute GNPA decreased by 2% QoQ to INR 96.5bn and NNPA decreased by 6.6% QoQ to INR 52.4bn. Slippages to GNPA during the quarter declined to INR 7.09bn vs. INR 8.25bn in 1QFY17. Stressed assets (Gross NPA's + Restructured Std. Advances) decreased by 1%QoQ to INR 140.5bn (10.49% of the Total Gross advances) as of...

Background: RBL bank (RBL) came into operations in 1943 and was incorporated as a small, regional bank in Maharashtra with two branches in Kohlapur and Sangli. Post the change in the management team in 2010, it has been one among the fastest growing private sector banks and now has 244 interconnected branches and 387 interconnected ATMs spread across 16 Indian states and union territories serving ~3.15mn customers. The bank offers a comprehensive range of banking products and services customized to cater to the needs of large corporations, SMEs, agricultural customers, retail customers and development banking & financial inclusion (low income) customers. Loan book of the bank grew at a CAGR of 58% over FY11-17 and stands at INR 311bn...

Background: Kotak Mahindra Bank is one of the leading mature private sector bank having business interests across most financial services products. The bank started business in the mid-1980s as a bill discounting company. Since then, it has entered various financial services businesses, such as securities, investment banking, life insurance, asset management, and banking, and it has become one of the leading players in capital markets in India. Kotak obtained its banking license in 2002. It has...

Background: Bajaj Finance, a subsidiary of Bajaj Finserv is a leading NBFC with INR 689bn Assets under Management. The AUM is diversified with 2-3 Consumer Finance 45.7%, SME business 34%, Commercial-14.6% & Rural- 5.7%. Asset Quality is strong with Gross NPA - 1.7% & Net NPA - 0.53% with Prov Coverage at 69%. On liabilities, Banks, Money market and retail deposits for 32%, 58% & 10% respectively. Return ratios are very healthy in 1QFY18 with ROA at 1% & ROE at...

Background: DCB Bank Limited (formerly Development Credit Bank Limited) is the smallest listed private sector lender. DCB has a deposit base of INR 192bn and advances of INR163bn at the end 1QFY18, making it the smallest bank in the listed private sector space, including both new and old generation private sector banks. Promoter group the Aga Khan Fund for Economic Development (AKFED) & Platinum Jubilee Investments holds ~15.02% stake. DCB services entails Corporate Banking - 15%, SME -11%, Agriculture 17%, Mortgages 44%. As on 1QFY18, the bank has a...

Background: South Indian Bank (SIB), among the mid-sized banks in the private sector space, operates a network of about 851 branches and about 1,344 ATMs. The bank's business is largely skewed towards the Southern state with half of its branches located in Kerala. SIB has established a strong brand recall among the Keralite-NRI Diaspora. With no identifiable promoters SIB is run by a team of professionals. As of 1QFY18 the bank had deposits of ~INR 658bn and...

Background: Ashok Leyland (AL) (established 1948) is one of the leading commercial vehicle (CV) manufacturers in India. Part of the Hinduja group, the company operates out of seven manufacturing plants located in South India and one in Pant Nagar, Uttarakhand. The company's product range comprises of heavy/medium trucks and buses. The company has presence in 37 countries. Its volume composition: Ashok Leyland has more than 1,462 networks for sales as of FY16. ALL has many JVs: Nissan for LCVs, John-Deere for Construction Equipment, Irizar TVS for coach building, Alteams for High Pressure Aluminium die-castings, Continental for...

Background: AU Small Finance Bank had commenced operations in 1996 in Jaipur, Rajasthan and was registered as an NBFC with the RBI in 2000. In 2005, it became a commercial associate of HDFC Bank for originating and servicing vehicle loans which assisted the company in the implementation of various processes and systems. AUSFB has recently transitioned from a prominent, retail focused non-banking finance company (NBFC), which primarily served low and middle income individuals and businesses that have limited or no access to formal banking and finance...