FINANCIAL RESULT FOR THE FIRST QUARTER ENDED 31/03/2017
(UNCONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 1,992.799
(UNCONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 1,288.315
(UNCONSOLIDATED) EPS = 1.23
(CONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 2,030.551
(CONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 1,324.048
(CONSOLIDATED) EPS = 1.26
HMB: Strong suit comes to play, 'Buy' with TP of Rs42
November 27, 2019 (JS Research)
With an earnings growth of ~50% YoY in CY20F, we believe current multiples reflect an attractive opportunity to accumulate the stock at prevailing market price as our Dec-2020 Target Price of Rs42 offers a total return of ~30%.
With 40% payout assumption (historic average: 55%), HMB's CY20F D/Y clocks in at 11.6% (highest from JS Banking Universe), reflecting room for higher dividends than our base case.
Falling bond yields are upside to our current base case, with support to BV.
The bank's deposit growth as at Sep-2019 clocked in at 18% YoY, with 24% YoY growth (Rs33bn) in current account deposits.
However, the bank struggles with NIMs generation due to higher Interest Bearing Deposits. Nonetheless, limited growth in core income continues to be compensated by robust growth in fee income from trade finance.