Our expectations for Q4FY18E:
NII – Rs2,470cr, up by 14.3% yoy due to 20% loan growth expectation
PPOP – Rs1,984cr, up by 17.1% yoy due to higher NII and other income
PAT – Rs1,158cr, up by 18.6% yoy, due to higher PPOP and fall in provisions
Q3FY18 performance highlights:
NII – Rs 2,394cr, up by 16.7% yoy, NII higher led by strong loan growth
PPOP – Rs1,820cr, increased by 19.1% yoy, due to higher NII
PAT – Rs1,053cr, grew by 19.7% yoy due to higher PPOP
We expect the standalone bank to report 20% loan growth. NIM is likely to decrease by 10bps qoq to 4.4%. Overall, we expect NII growth of 14% yoy.
With strong digital initiatives and merger synergies from eIVBL, fee income would be a key growth driver for the bank.
We factor in other income growth of 13% in 4Q, driven mostly by healthy fee traction.
We expect asset quality to remain stable, with GNPA at ~2.3% and NNPA at 1.1%, led by a high provision coverage ratio.
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