Result Review 4QFY2013

Punjab National Bank

As far as operating performance is concerned, PNB delivered on expected lines, however, on the asset quality front, the bank witnessed improvement (contrary to market expectations). NII growth at 14.2% yoy and operating income growth at 12.9% yoy, came on expected lines. Operating expenses grew by 27.4% yoy, marginally above estimates and hence, the pre-provisioning profit de-grew by 2.9% yoy, slightly lower than our expectation of a flat performance on that front. On the asset quality front, the bank reported sequential improvement in Gross NPA levels by around 4% each. The bank prudently chose to increase its provision coverage ratio (up by around 300bp) over earnings and thereby increased its provisioning expenses by 43.8% yoy and reported an earnings decline of 20.6% yoy. At the CMP, the stock is trading at valuations of 0.7x FY2015E ABV. Source: AngelBroking

Union Bank  
Union Bank reported better than expected performance for the quarter. NII grew moderately by 5.5% yoy, while non-interest income grew by healthy 15.9% yoy, thereby resulting in moderate operating profit growth of 5.4% yoy, as against streets’ expectation of a de-growth. On the asset quality front, the gross NPA levels were lower by around 1% qoq, however, due to 100bp qoq decline in PCR, the Net NPA levels were higher by 5.8% qoq. Provisioning expenses grew by 26.8% yoy and resulted in PBT level earnings decline of 4.9% yoy, however, aided by lower effective tax rate of 23.3% during the quarter as against 28.5% in 4QFY2012, the bank reported marginal earnings growth of 2.1% yoy. At the CMP, the stock is trading at valuations of 0.7x FY2015E ABV.Source: AngelBroking

Indian Bank
Indian Bank reported a weak set of numbers for the quarter, as they posted PBT level earnings decline of 62.2% yoy (PAT decline was limited to 15.4% yoy, owing to higher yoy tax write-backs of `203cr ). While NII grew at muted 2.3% yoy, noninterest income grew strongly by 50.8% yoy (in-line with industry trends), the bank posted moderate operating income growth of 12.8% yoy. Operating expense for the bank grew unexpectedly by 69.4% yoy (we have sought clarity from management on surge in this line item), leading to 29.2% yoy decline in preprovisioning profits. The bank continued to witness sequential asset quality deterioration, as their Gross and Net NPA levels were higher by around 11% each and consequently, the provisioning expenses for the bank came in higher than expectations, though declined by 15.4% yoy. The stock is trading at valuations of 0.5x FY2015E ABV.Source: AngelBroking

Asian Paints 
For 4QFY2013 Asian Paints posted a 6.9% yoy growth in net sales to `2,714cr, which was below estimates impacted by slowdown in demand due to weakeconomic scenario. OPM fell by 106bp yoy to 13.8%, primarily on account ofincrease in other expenses which as a % of net sales went up by 318bp on a yoybasis. Net Profit fell by 3.6% on a yoy basis to `251cr, due to weak operational performance.Source: AngelBroking