Sector report

1. BFSI Q4’11 Preview
Eye on Future
Analyst: Abhisek Sasmal
Mail: asasmal@microsec.in
Phone: 91-033-3051-2175
91 033 3051 2175
4th April ’2011

2. Contents
Page Numbers
P N b
Macro Economic Trend During Q4’11 2-3
Policy Actions – step towards future 4-7
Banking Sector – Long Term Budget Impact 8
Banking Sector Outlook 9
Q4’11 Preview 10-11
Valuation Matrix 12
Notes 13
4th April ’2011

3. Macro Economic Scenario During Q4’11
RBI Continues with its rate hikes. We expect another 50 bps hike in CY2011 Higher base of last year is expected to take care of the price rise in commodities
10%
12%
9% Inflation Trend (y-o-y %)
10%
8%
7% 8%
6% 6%
5% 4%
4% 2%
3%
0%
2%
-2%
CRR Repo Rate Reverse Repo
Source: Bloomberg, Mi
S Bl b Microsec R
Research
h
30 Higher deposit mobilization from Q4’11 brings some sanity Liquidity pressure easing out from Dec’10 levels as govt started
to incremental C/D ratio 1000 using its ideal cash with RBI
25 800
600
20
400
15 200
0
10
-200
5 -400
-600
0
-800
-1000
-1200
Credit Growth% Deposit Growth% Source: Bloomberg, Microsec Research
2 4th April ’2011

4. Macro Economic Scenario During Q4’11
Rise in short term CD rates indicates tight liquidity situation
18 which persists for last 6 months
16
16
14 14
12 12
10 10
8 8
6 6
4 4
2
2
0
0
1-Jan-08
1-Mar-08
1-May-08
1-Mar-09
1-May-09
1-Mar-10
1-May-10
1-Jul-08
1-Sep-08
1-Nov-08
1-Jan-09
1-Jul-09
1-Sep-09
1-Nov-09
1-Jan-10
1-Jul-10
1-Sep-10
1-Nov-10
1-Jan-11
1-Mar-11
2-Jan-08
2-Mar-08
2-May-08
2-Mar-09
2-May-09
2-Mar-10
2-May-10
2-Jul-08
2-Sep-08
2-Nov-08
2-Jan-09
2-Jul-09
2-Sep-09
2-Nov-09
2-Jan-10
2-Jul-10
2-Sep-10
2-Nov-10
2-Jan-11
CD 3month CD 6month CD 12month
CP 3month CP 6month CP 12 month
Source: Bloomberg, Mi
S Bl b Microsec R
Research
h
Lower than expected borrowing programme for FY12 is expected to calm
down the bond yields
Government Bond Yield Curve
(%)
5 60
4 50 9.00
40 8.00
3
30 7.00
2 6.00
20
1 5.00
10
4.00
0 0
3.00
FY06 FY07 FY08 FY09 FY10 FY11 FY12E
Central Govt Net Market Borrowing (INR Tn) 4/1/2010 3/1/2011
Bank's share in Govt O/S Bonds(%) RHS
Source: Bloomberg, Microsec Research
3 4th April ’2011

5. Policy Actions – step towards future
Banking Laws (Amendment ) Bill 2011
The proposed Banking Laws (Amendment) Bill 2011 proposes aligning the voting rights in private banks in proportion to the shareholding and raise
the ceiling in public sector banks from 1% to 10%.Under existing rules, the voting rights of a shareholder are capped at 1% in nationalized banks and
10% in private banks, irrespective of the equity stake. Besides, it enables nationalized banks to increase or decrease their authorized capital with
approval from the central government and Reserve Bank, without being limited by the ceiling of a maximum of INR 3Bn. It also proposes to give
powers to the nationalized banks to issue two additional instruments -bonus shares and rights issues for accessing the capital market to raise capital
required for expansion of banking business.
In our view, if approved, the amendments are going to be a positive trigger specially for PSU banks & small private sector banks. For PSU banks, it will be
pp g g p gg p y p
much easier to access the capital market. It will also help them to increase their capital base to support their business growth.
Small Private banks like Dhanalaxmi bank, South Indian Bank, Laxmi villas bank, Federal bank, Karur Vysya bank, City Union Bank may show sudden
spurt in interest from the investor community because these banks do not have single promoter or very low promoter holding (less than 12%). Groups who
are interested in getting banking license may show interest in these banks to get a indirect route of entering into the banking space. Even the NBFCs will
also try to acquire old private sector b k to ki k
l i ld i banking business with an existing set-up. W b li
banks kick-start b ki b i ih i i We believe these amendments are j the prelude of the
h d just h l d f h
much anticipated Banking license bill. We also anticipate some amendment in the Banking Merger & Acquisition rules before the govt proceed with new
banking licenses.
Capital Infusion in PSBs
Capital infusion proposed by GOI in its recent Capital Infusion Programme, is going to benefit the PSU banks in long term. However, the RoE may dilute a
bit in near term due to higher capital base, but this capital is going to support an average 20% credit growth for the below mentioned (next page) banks in
years to come. Increase of core tier 1 capital is a big positive as it will increase the loss absorbing capacity of banks. On 14th September’10, Basel Committee
for Banking Supervision (BCBS) had recommended the minimum core Tier-1 (common stock + retained earnings + pref. stock – deferred tax assets –
securitization exposure) capital requirement of at least 4 5% until 2015 An additional 2 5% capital conservation is expected to be in place by 2019
4.5% 2015. 2.5% 2019.
Usually, Indian PSU banks has larger proportion of lower quality capital due to perpetual debt component in tier 1capital. This infusion will take care of
that too.
4 4th April ’2011

6. Policy Actions – step towards future ….
RBI’s Working group suggestions towards Si l policy rate, fi d policy corridor etc
’ ki i d Single li fixed li id
We believe the single rate mechanism will put our Banking System at par with global practices as this is also a Standard International Monetary practice.
The Bank Rate which will be the rate at which the Reserve Bank will provide liquidity under a new collateralized Exceptional Standing Facility (ESF) is
recommended as the upper bound of the rate corridor and banks can dip into an additional 1% of their deposits, if they fall short of statutory liquidity ratio
(SLR),
(SLR) to borrow from the Central Bank at this rate This would tend to keep call rates anchored around the repo rate We believe this facility will provide
rate. rate.
some safety against unanticipated liquidity shocks. One of the recommendation is that on a daily basis too, banks are currently required to meet at least 70%
of their CRR needs, which has been raised to 80%. This will put some additional pressure on banks. Inclusion of oil bonds under the list of collateral for
reverse repo auction was also recommended. However, this can be debatable, as the fertilizer bonds are also then liable to be included in that list.
Banking laws Amendment bill, if passed may see some activities in highlighted counters Govt’s capital infusion (Expected, subject to change)
Promoter and Promoter Foreign Institutional Investors
Govt Pre- Post
Company Name Group % %
Govt Holding Increase Issue Issue
Axis Bank Ltd. 37.35 36.56 Capital Holding (Post in Net- Tier1 Tier-1
Issuance (Pre-Issue) Issue) Dilution worth Capital Capital
City Union Bank Ltd. 0.00* 17.04
Banks (Rs Mn) (%) (%) (%) (%) % %
Development Credit Bank
Ltd. 23.08 8.27 Allahabad 2,920 55 56 2.9 3.7 8.12 8.69
Andhra 6,180 52 55 8.5 11.5 7.81 9.59
Dhanalakshmi Bank Ltd. 0.00* 39.78
Bank of
Federal Bank Ltd. 0.00* 38.34 Baroda 32,809 54 58 9.9 18.2 8.22 11.03
Bank of
HDFC Bank Ltd. 23.40 29.37 India 10,100 64 66 4.1 6.2 8.29 9.25
ICICI Bank Ltd. 0.00 39.23 Bank of
Ms t a
M'shtra 3,5 0
3,520 77 79 11.9
.9 11.3
.3 5.68 7. 3
7.43
IndusInd Bank Ltd. 19.57 36.93
Corporation 3,083 57 59 3.3 4.5 9.03 9.73
ING Vysya Bank Ltd. 43.40 23.86 Dena 5,621 51 58 16.9 18.4 7.40 10.24
Jammu & Kashmir Bank Ltd. 53.17 22.62 IOB 10,540 61 66 13.7 12.9 8.36 10.35
Karnataka Bank Ltd. 0.00* 29.98 OBC 17,400 51 58 16.5 18.5 8.02 10.88
PNB 1,841 58 58 0.5 0.9 8.38 8.52
Karur Vysya Bank Ltd. 3.51 21.43 y
Syndicate
Kotak Mahindra Bank Ltd. 45.61 23.99 Bank 6,330 66 69 9.8 9.9 7.70 9.23
UCO 9,400 64 68 14.4 19.7 6.06 9.10
Lakshmi Vilas Bank Ltd. 10.99 6.55
Union Bank 10,960 55 58 6.1 9.2 7.68 9.10
South Indian Bank Ltd. 0.00* 38.61 United Bank 3,080 84 85 8.8 8.2 8.30 9.57
Yes Bank Ltd. 26.60 45.60 Vijaya 3,680 54 58 9.0 12.3 7.28 9.18
* Indicates that management control is with institutions Prices as on 21st March’11
March 11 Source: GOI, Company, Bloomberg, Microsec Research
5 4th April ’2011

7. Policy Actions – step towards future ….
Increase of CAR for deposit taking NBFCs
I f f d i ki NBFC
The Reserve Bank of India (RBI) has raised the minimum capital adequacy ratio (CAR) for deposit-taking Non-Banking Financial Companies (NBFCs)
from 12 per cent to 15 per cent, effective from March 31, 2012. It expects that tightening of prudential norms will provide a cushion to these NBFCs
in times of stress. Non-deposit taking NBFCs are already required to maintain a CAR of 15 per cent. This means for these NBFCs to give Rs 100 as
loans, they should have a capital base (equity + d b ) of Rs 15.
l h h ld h i lb ( i debt) f R 15
Scrappage policy, if implemented can be a big boost for Banks
Taking a cue from the US and European Union, India too may come out with its own version of the ‘cash for clunkers’ programme. In what could
be boost f automakers and a d li h f green activists, the government i considering a scrappage policy f old vehicles, as suggested b the
b ab for k d delight for i i h is id i li for ld hi l d by h
Society of Indian Automobile Manufacturers (SIAM), the auto industry body. The scrappage policy, if gets implemented, would be revenue positive
for the government despite the concessions doled out. Not only that, it can be big boost for Indian Banks who are focused on their auto loan
portfolio. Incremental business generate on the back of the Scrappage policy can contribute 1% to 3% to the outstanding book.
NBFC CAR (%) As on
Auto finance Disbursements INR Bn FY07 FY08 FY09 FY10
Reliance Cap 28.0 Mar-10
Indiabulls 27.1 Jun-10 Cars 270 294 245 304
STFC 23.0 Jun-10 Growth% 8.9% -16.7% 24.1%
BAFL 23.0 Mar-10
Utility Vehicles 95 102 78 105
Manap.Gen 22.1 Jun-10
SREI Infra. 22.0 Mar-10 Growth% 7.4% -23.5% 34.6%
REC 21.0 Jun-10 Commercial Vehicles 302 286 194 232
IDFC 20.5 Mar-10
Growth% -5.3% -32.2% 19.6%
Aditya Bir. Nuv. 17.9 Jun-10
MMFSL 17.4
17 4 Jun-10
J 10 Two-Wheelers
Two Wheelers 145 112 76 71
PFC 17.2 Jun-10 Growth% -22.8% -32.1% -6.6%
IFCI 17.0 Jun-10
Total 811 794 593 712
Sundaram Fin. 16.9 Mar-10
LIC Housing 14.9 Jun-10 Growth% ‐2.1% ‐25.3% 20.1%
Source: ACE Equity, Microsec Research
6 4th April ’2011

8. Policy Actions – step towards future ….
New banking licenses
The Reserve Bank of India(RBI) had put up a discussion paper on issuing New Banking Licenses in August, 2010.
According to the norms earlier promulgated, the possibility for Industrial Houses to be allotted with Banking Licenses looked remote. However, the RBI
may allow the Corporate Houses to bid for Banking Licenses but with a strict shareholding which may limit their influence on the decision making with
respect to large size financing. Also, Industrial Houses with rural focus may be given a chance to set up banks. If big corporate houses are allowed to enter
the banking space, the banking industry would then slowly but surely move from a regime of ‘large number of small banks’ to ‘small number of large
banks’. The new era is going to be one of consolidation around identifying core competencies where even the big banks would want to acquire smaller
ones to gain scale against probable new entrants.
Insurance Bill 2011
There were flurry of activities relating to Insurance sector. First, it was Japanese Insurance company Nippon Life Insurance which had acquired a 26%
stake in Reliance Capital’s subsidiary Reliance Life Insurance, valuing it at INR 11,500 crore. Despite falling New Business Achieved Profit (NBAP)
margins of insurers due to new IRDA pricing norms, the deal values Reliance Life at 16 times the new business premium. This shows foreign partner’s
confidence i the I
fid in h Insurance sectors’ revival i f
’ i l in future. Thi also ensures a fl
This l floor valuation f other Lif I
l i for h Life Insurance players whose valuation i at a nadir.
l h l i is di
Second, Buffett's Berkshire Hathaway entered the Indian non-life insurance sector as a corporate agent of Bajaj Allianz General. Even he was quite vocal
in his meetings with IRDA chief for increasing FDI limit in this capital intensive sector to 49%.
Focus on rural area could be the theme for new banking licenses
Branches
B h % of rural
f l
As on 3/31/2010 Rural to total
State Bank Group 5,915 34.33
Nationalized banks 13,652 32.82
Private sector 340 6.69
State Bank of India
S B k f I di 4,678
4 678 37.61
37 61
Punjab National Bank 1,947 41.31
ICICI Bank 151 8.89
HDFC BANK 95 5.5
Axis Bank 44 4.55
7 4th April ’2011

9. Banking Sector – Long Term Budget Impact
National Manufacturing Policy
“ For sustained growth of GDP and productive employment for younger generation, it is imperative that the growth in manufacturing sector
picks up. We expect to take the share of manufacturing in GDP from about 16 percent to 25 percent over a period of ten years” – FM
This means on a assumed growth of 8% in GDP, the manufacturing sector will grow at CAGR of 15%. This growth is at least 500-600 bps
higher than the average growth the sector has registered in the last two years. With core manufacturing constitutes a big chunk (~17-20%) of
bank’s loan book, we expect this as a long term positive for banking sector too.
Bharat Nirman
“ In pursuance of my earlier budget announcement to provide a real wage of INR100 per day, the Government has decided to index the wage
rates notified under the MGNREGA to the Consumer Price Index for Agricultural Labor” – FM
“I am happy to announce an increase in the remuneration of Anganwadi workers from INR1,500 per month to INR3,000 per month and for
INR1 500 INR3 000
Anganwadi helpers from `750 per month to INR1,500 per month.” – FM
This means for 21 Mn employees under MGNREGA scheme & 2.2 Mn Anganwadi workers and helpers will now get much higher
wages, which not only increase their consumption but also encourage them for savings.
Investment Environment
“Currently, only FIIs and sub-accounts registered with the SEBI and NRIs are allowed to invest in mutual fund schemes. To liberalize the
portfolio investment route, it has been decided to permit SEBI registered Mutual Funds to accept subscriptions from foreign investors who
meet the KYC requirements for equity schemes This would enable Indian Mutual Funds to have direct access to foreign investors.” – FM
schemes.
With un-official figure of USD 150 Bn to USD 1 Tln of black money lying in tax heavens and foreign bank accounts, this step may force some
of it to convert into white money in coming years. This also helps banks with AMC operations.
8 4th April ’2011

10. Banking Sector – Outlook
The outlook for the banking sector in coming quarter (Q411) appears positive on the back of expected growth in credit and business earnings during
the busy seasons. However the main risk to our optimism remains the inflation which may force RBI to continue with its interest rate tightening
cycle. Crude in that case may prove to be the main spoilsport if disruption in supply happens over prolonged agitation and tension in Middle-east
countries.
On the positive side, we are still bullish on the future prospect of the banking sector in the long run. We believe, banks would benefit in a rising
GDP growth scenario. We are anticipating a credit growth of 18% for CY2011 with more focus on non-infra loans. Deposit growth which had been a
laggard till now, may see some revival going forward due to recent deposit hikes which makes the real interest rates turning positive. Current tight
liquidity , higher CD ratio and new base rate regime have given banks the required pricing power to pass on most of the increase in cost of funds to
the end borrowers.
On the negative side, Net interest margin is likely to be under pressure in near term. We expect margins across the board to be lower by 10-15 bps
due to a steep rise in short term interest rates. The impending pension liability may become a near term overhang on the whole PSU bank lot.
However, for banks with strong CASA base may see 5-7 bps margin erosion from the multiyear high levels. On the asset quality front,
Implementation of CBS for computation of NPA may throw some negative surprises for PSU banks. Private banks with strong reporting structure are
a better bet in that case.
Private Sector Banks FY08 FY09 FY10 FY11E FY12E Public Sector Banks FY08 FY09 FY10 FY11E FY12E
NIMs% 2.76 2.98 2.9 3.3 3.20 NIMs% 2.2 2.2 2.14 2.48 2.33
C/I ratio 51.33 49.42 48.94 46.5 44.8 C/I ratio 55 53 54.2 48 46.3
NNPA % 0.9 1.22 1.48 1.05 0.95 NNPA % 0.9 0.75 1.1 1 1.15
Source: ACE Equity, Microsec Research
9 4th April ’2011

11. Q4’11 Preview
Private Banks
Q4'11E Q4'10 Q3'11 YoY% QoQ% Commnets
NII 29849.1 23514 27767 26.9% 7.5%
Share of CASA may come down a bit for this quarter as hike in term deposits
Total Income 40891 32549 39045 25.6% 4.7%
rates are quite sharp. Loan growth to remain strong with more focus on
HDFC B k Net Profit
Bank 11521 8366.3 10878.8 37.7% 5.9% corporate b k With 95 b hik i b
t book. bps hike in base rates (D i Q4'11) it shows good
t (During Q4'11), h d
pricing power in tight liquidity situation. NIMs to remain almost flat. Fee
NIM% 4.18 4.4 4.2 - 23 bps - 2 bps income to show good growth.
NNPA% 0.2 0.3 0.2 - 10bps 0 bps
NII 18580.1 14600.7 17331.1 27.3% 7.2%
Total Income 31156.93 23936 28809 30.2% 8.1% Axis bank can surprise on its fee income growth this quarter. However, NIMs
may come down a bit due to Axis's high share of bulk deposit (40%) in overall
Axis Bank
Net Profit 9598 7648.7 8913.6 25.5% 7.7% deposits. Lower slippage and higher recoveries and write off can boost
bottomline.
NIM% 3.78 4.09 3.81 - 31 bps - 3bps
NNPA% 0.25 0.36 0.29 -11 bps - 4 bps
Public Banks Q4'11E Q4'10 Q3'11 YoY% QoQ% Commnets
NII 12004.7 8204 11301.8 46.3% 6.2%
Loan growth to remain strong in this quarter too. 50 bps hike in base rates may
Total Income 15345.6 11024 14813.9 39.2% 3.6% help the bank to contain the margin pressure to only 8 bps (QoQ). Higher
IOB Net Profit 2320 1274.4 2316.6 82.0% 0.1% recoveries and upgrades may show in asset quality improvement. However,
higher provisions for 2nd pension option liability can put some pressure on
NIM% 3.19 2.73 3.27 46bps -8 bps bottomline.
NNPA% 1.43 2.52 1.51 -109 bps -8 bps
NII 11141 7601 12040 46.6% -7.5%
Total Income 15304.8
15304 8 13072.5
13072 5 16512.3
16512 3 17.1%
17 1% -7 3%
7.3% Loan growth to moderate a bit Due to lower CASA base and higher proportion
bit.
of bulk deposits, the NIMs can come under pressure. With higher exposure to
IDBI Bank Net Profit 3991 3184.1 4540.7 25.3% -12.1% the troublesome Real estate, MFI and telecom sector , the asset quality may show
NIM% 2.07 1.4 2.2 67 bps - 13 bps some pressure this quarter too.
NNPA% 1.22 1.02 1.2 20 bps 2 bps
Source: ACE Equity, Microsec Research
10 4th April ’2011

12. Q4’11 Preview continued….
NBFCs Q4 11E
Q4'11E Q4 10
Q4'10 Q3 11
Q3'11 YoY% QoQ% Commnets
NII 3671.27 2980 3521.6 23.2% 4.3%
Loan disbursements to grow strong boosted by resumption in disbursements for
Total Income 4315 3469 5450.6 24.4% -20.8%
builder loans, which had been stopped during Q3'11. LICHFL has fully provided
LICHFL Net Profit 2893 2135* 2134.8 35.5% 35.5% for the dual rate schemes last quarter. If the clarification comes in favor of
LICHFL, the reverse action will boost its bottom line. However, we haven't build
NIM% 2.95 2.4 3 55 bps - 5 bps
that amount in to our model.
NNPA% 0.23
0 23 0.34
0 34 0.2
02 - 11 bps 3 bps
NII 1075.37 753 1039 42.8% 3.5% Higher than expected other income and lower tax outgo had boosted DHFL's
earnings last quarter. We are not expecting any such things this quarter. Loan
Total Income 1175.37 943 1243 24.6% -5.4% growth to remain strong this quarter too (25-30% YoY). The Company has set up
Dewan Housing Net Profit 560.83 417.5 617.8 34.3% -9.2% DHFL holdings Private limited, as a 100% subsidiary of the Company, which will
Finance act a Special Purpose Vehicle (SPV) for acquiring and holding 67.56% equity stake
p p ( ) q g g q y
NIM% 2.76 3 2.85 -24 bps - 9bps of Deutsche Postbank Home Finance Ltd (DPHFL). This would boost their overall
portfolio and add to the loan book from FY12. NIMs may come under some
pressure due to higher dependence on bank borrowings.
NNPA% 0.65 0.96 0.7 - 31 bps - 5 bps
NII 352.37 272.7 337.2 29.2% 4.5%
Loan book growth to remain above industry average at around 25% YoY. NIMs to
Total Income 422.91
422 91 502.7
502 7 397.1
397 1 -15.9%
-15 9% 6.5%
6 5% come under pressure as bank borrowing cost rises 40% of its source of funds
rises.
GRUH Finance Net Profit 185.05 328** 175.4 -43.6% 5.5% comes in the form of bank borrowing. However GRUH can pass some of it to the
NIM% 3.5 3.95 3.63 - 45 bps -13 bps end borrower. Increasing focus on riskier segments like self employed can
deteriorate its asset quality. Higher provisions may hurt the bottomline.
NNPA% 0 0 0 - -
NII 2817.10 1982 2561 42.1% 10.0%
Loan book to grow at a healthy pace, mostly driven by its secured book. change in
g yp , y y g
Total Income 3171.03 2569 2847.8 23.4% 11.4% business mix , rising interest rates is expected to hurt margins to the tune of 10 bps
Bajaj Finance Net Profit 893.30 252 763.5 254.5% 17.0% for this quarter. More focus on secured lending, help from Credit Bureau (CIBIL),
NIM% 12.7 15 12.8 -230 bps -10 bps cleaning up of the legacy book would reduce NPA significantly going forward and
would boost bottom-line due to lesser provisioning.
NNPA% 1 2.2 1.1 -120 bps -10 bps
NII 8607.2
8607 2 7278 8480 18.3%
18 3% 1.5%
1 5%
Muted disbursements due to lower govt spending may result in a flat loan growth
Total Income 9588 7998 9400 19.9% 2.0% for this quarter. REC may able to protect its margin this quarter due to lower
REC Net Profit 6825.92 5611 6640 21.7% 2.8% dependence on bank loans (18%). Recent announcements of raising USD 1 Bn
through ECB and USD 200 Mn by issuing offshore corporate bonds emphasize the
NIM% 4.5 4.4 4.56 10 bps -6 bps
demand visibility for the sector.
NNPA% 0 0 0 0 0
* Net of extra provision and income from stake sell in LIC MF ** PAT Includes INR 230 Mn other income Source: ACE Equity, Microsec Research
11 4th April ’2011

13. Valuation Matrix
Particulars EPS BVPS P/E P/BV
CMP Target FY10 FY11 E FY12E FY13E FY10 FY11 E FY12E FY13E FY10 FY11 E FY12E FY13E FY10 FY11 E FY12E FY13E
Bankex (TTM) 13299.0 700 812 923 1057 5134 5575 6015 6613 19.00 16.38 14.41 12.58 2.59 2.39 2.21 2.01
Axis Bank 1403.0 1593 70 82 99 123.2 395.6 454 533 637 20.04 17.11 14.17 11.39 3.55 3.09 2.63 2.20
HDFC Bank 2342.0 2596 65 80.4 107 139 448 521 607 721 36.03 29.13 21.89 16.85 5.23 4.50 3.86 3.25
IOB 143.6 195 13 14.6 19.9 25 119.7 133 149.4 169.4 11.05 9.84 7.22 5.74 1.20 1.08 0.96 0.85
IDBI 142.5 215 14.1 15 23.6 27.7 103.3 118.5 133.5 177.3 10.10 9.50 6.04 5.14 1.38 1.20 1.07 0.80
REC 254.0 286 23.06 24.23 29.8 36.36 112.2 128.7 142.9 164.3 11.01 10.48 8.52 6.99 2.26 1.97 1.78 1.55
LICHFL 225.0 210** 15.5 19.4 24.9 31.8 70.5 86.8 104.8 118.5 14.52 11.60 9.04 7.08 3.19 2.59 2.15 1.90
GRUH Finance 360.2 450 18.6 22.5 27.9 31.8 75.8 95.34 119 141.6 19.37 16.01 12.91 11.33 4.75 3.78 3.03 2.54
Dewan 268.1 356 19.8 27.06 37.02 48.13 106.2 127.1 155.8 185.6 13.54 9.91 7.24 5.57 2.52 2.11 1.72 1.44
Bajaj Finance 699.0 1080 24.4 60.3 79.8 111.08 314.5 370 440 542 28.65 11.59 8.76 6.29 2.22 1.89 1.59 1.29
Source: Bloomberg, ** Target achieved Prices as on 31st March’11 closing
Microsec Research
12 4th April ’2011

14. Notes
13 4th April ’2011

15. MICROSEC RESEARCH IS ALSO ACCESSIBLE ON BLOOMBERG AT
<MCLI>
Kolkata Mumbai
Investment Banking Brokerage and Wealth Management 74 A, Mittal Tower, 7th Floor
Azimganj House, 2nd Floor Shivam Chambers, 1st Floor 210, Nariman Point, Mumbai – 400 021, India
7, Camac Street, Kolkata – 700 017, India 53, Syed Amir Ali Avenue, Kolkata – 700 019, India Tel: 91 22 2285 5544, Fax: 91 22 2285 5548
Tel: 91 33 2282 9330, Fax: 91 33 2282 9335 Tel: 91 33 3051 2000, Fax: 91 33 3051 2020
Email: info@microsec.in Website: www.microsec.in
Disclaimer
This document is prepared by the research team of Microsec Capital Ltd. (hereinafter referred as “MCL”) circulated for purely information purpose to the
authorized recipient and should not be replicated or quoted or circulated to any person in any form. This document should not be interpreted as an
Investment / taxation/ legal advice While the information contained in the report has been procured in good faith from sources considered to be reliable
advice. faith, reliable,
no statement in the report should be considered to be complete or accurate. Therefore, it should only be relied upon at one’s own risk. MCL is not soliciting
any action based on the report. No indication is intended from the report that the transaction undertaken based on the information contained in this report
will be profitable or that they will not result in losses. Investors must make their own investment decisions based on their specific investment objectives and
financial position and using such independent advisors, as they believe necessary. We and our affiliates, officers, directors, and employees, including persons
involved in the preparation or issuance of this material may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of
company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation discussed
herein or act as advisor or lender I borrower to such company (ies) or have other potential conflict of interest with respect to any recommendation and
related information and opinions. The same persons may have acted upon the information contained here.
Neither the Firm, nor its directors, employees, agents, representatives shall be liable for any damages whether direct or indirect, incidental, special or
consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
4th April ’2011

17. 4th April ’2011