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Bank of Baroda reports 24% year-on-year rise in Q2 standalone net

Banking & Finance

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Bank of Baroda (BoB) reported a 24 per cent year-on-year (YoY) increase in second quarter standalone net profit to ₹2,088 crore from ₹1,679 crore in the year-ago quarter on robust growth in non-interest income.

Net interest income (difference between interest earned and interest expended) edged up 2 per cent YoY to ₹7,566 crore (₹7,410 crore in the year ago quarter).

Non-interest income, including commission-exchange-brokerage, forex income, trading gains, and recovery from technically written-off accounts rose 23 per cent YoY to ₹3,579 crore (₹2,910 crore).

NPAs improve

For the reporting quarter, the public sector bank made provisions of ₹2,600 crore towards non-performing assets (NPAs) and bad debts written-off, up 14 per cent YoY from ₹2,277 crore in the year ago period.

Fresh slippages were a tad higher at ₹5,223 crore (₹5,129 crore). Reduction in NPAs via recovery, upgrdation and write-offs was at ₹9,327 crore (₹9,836 crore).

Also see: Bank of Baroda signs MoU with NCDEX e-Markets

Gross NPA position improved to 8.11 per cent of gross advances as at September-end 2021 against 8.86 per cent in the preceding quarter. Net NPA position too improved to 2.83 per cent of net advances from 3.03 per cent.

Domestic gross advances grew 2.99 per cent YoY to ₹6,23,368 crore. This came mainly on the back of growth in retail (auto, personal, gold, education and home loans), agriculture and MSME advances. Overseas gross advances declined 2.68 per cent YoY to ₹1,10,665 crore.

Also see: Banks make higher-than-required provisions for Srei Group exposure

Domestic deposits increased by 3.43 per cent YoY to ₹8,64,603 crore. Overseas deposits declined 19.90 per cent YoY to ₹94,881 crore

BoB’s second quarter consolidated net profit increased by about 22 per cent YoY to ₹2,168 crore (₹1,771 crore).

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India IT services market grows by 7.3% in first half of 2021, BFSI News, ET BFSI

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New Delhi, The Indian IT services market grew by 7.3 per cent in the first half of 2021, compared to the 5.7 per cent growth in the same period last year, as enterprises continued to invest in digital transformation initiatives, a new report showed on Wednesday.

Overall, the Indian IT and business services market was valued at $6.96 billion and recorded a 6.4 per cent year-over-year (YoY) growth in the January-June period, compared to 5.1 per cent in the first half of 2020, according to the International Data Corporation’s (IDC) worldwide semi-annual services tracker.

“Verticals like government and manufacturing, which delayed IT investments in 2020, hiked up their IT spend in H1 2021, and enterprises in the country continued to increasingly depend on IT service providers for solutions in areas like cloud, security, artificial intelligence, analytics, etc.,” said Harish Krishnakumar, senior market analyst, IT Services, IDC India.

The IT and business services market is projected to reach $19.93 billion by the end of 2025, growing at a CAGR of 8.2 per cent between 2020-2025, the report said.

“H1 2021 turned out to be the year that showcased enterprise resiliency strengthen at a remarkable pace. Most enterprises witnessed a bounce back with business reaching the pre-pandemic situation,” said Shweta Baidya, senior research manager, enterprise software and ICT services, IDC India.

While large enterprises continued to take long strides towards transformation initiatives, the mid-market segment adopted a cautious approach towards technology investments, with a focus on investments that provided quick returns in the form of customer acquisition, talent retention or financial returns, she added.



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2 Stocks To Buy From ICICI Direct For Good Gains of 28% & 22% In 1 Year

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Buy MM Forgings with a target price of Rs 1125

ICICI Direct has suggested buying the stock of MM Forgings with a target price of Rs 1125 resulting in a gain of 28% in 12 months from the current market levels. M.M. Forgings Limited is a leading company that manufactures and sells iron and steel forgings. The firm is a major manufacturing player in India, Europe, and the United States (FY21 geographical mix: domestic 50%, exports 50%).

According to the brokerage, the company’s standalone revenue growth was at Rs 261.3 crore for Q2FY22, EBITDA margins were flattish at 18.2% amid operating leverage gains; gross margins down ~250 bps sequentially and consequent PAT grew ~16% sequentially to Rs 27.7 crore.

Key triggers for future price performance of MM Forgings according to ICICI Direct

  • Healthy outlook across served markets; would benefit from impending India CV revival as well as pick-up in US Class 8 truck orders. Underlying market growth, new product introduction led to 36.1% FY21-23E sales CAGR.
  • We expect sales volume to grow at a CAGR of 27.5% in FY21-23E to ~78,000 tonnes in FY23E vs. ~48,000 tonnes clocked in FY21.
  • Operating leverage gains, better mix to push margins to 20% (FY23E).
  • FY23E RoCE at ~15% on margin improvement, sweating of assets.
  • Trades at an inexpensive valuation of (less than 14x P/E, less than 10x EV/EBITDA on FY23E).

What should investors do?

The brokerage has said “The company’s stock price has grown at ~33% CAGR from ~Rs 215 levels in November 2016, thereby vastly outperforming Nifty Auto Index. We value MMF at 17x PE on FY23E basis for a revised target price of Rs 1125 per share (earlier target price Rs 925).”

Buy Action Construction Equipment with a target price of Rs 320

Buy Action Construction Equipment with a target price of Rs 320

ICICI Direct has recommended buying Action Construction Equipment’s stock with a target price of Rs 320, implying a gain of 22% in a year from current market prices. The stock was trading at Rs 260 per share at the time brokerage’s buy recommendation, however, today it is trading at a price of Rs 256.90. ACE – Action Construction Equipment Ltd is India’s foremost material handling and construction equipment manufacturer having a dominant position in the Mobile Cranes and Tower Cranes segments.

According to ICICI Direct ACE reported revenue for the Q2FY22 at Rs 360.9 crore, up 35% YoY & 12% QoQ, the absolute EBITDA of the company remains at Rs 34.8 crore, up 15.2% QoQ and 43.8% YoY and PAT remains at Rs 23 crore vs. Rs 14.6 crore in Q2FY21 & Rs 19.3 crore in Q1FY22.

Key triggers for future price performance of ACE according to ICICI Direct

  • Strong growth in FY22E & FY23E with sustained EBITDA margins.
  • The construction equipment segment growing and occupying a larger pie in overall revenue contribution.
  • Upcoming government & private CAPEX provide a fillip to the sector.

What should investors do?

ICICI Direct has reported in its research report that “ACE continues to tread on its growth path. Even with a disrupted H1FY22, the management has guided for 20-25% growth. We continue to remain positive and retain our BUY rating on the stock. We value ACE at Rs 320 i.e. 15x EV/EBITDA (FY23E).”

Disclaimer

Disclaimer

The above stocks are picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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Axis Bank inks pact with Army Insurance Group for retail mortgage loans

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Axis Bank on Wednesday signed an MoU with the Army Insurance Group (AGI) to offer retail mortgage loans to the Indian Army.

“The bank will offer best-in-class products and services to defence personnel to cater to their home loan requirements,” it said in a statement.

Through this partnership, it will exclusively offer higher loan amounts as well as the facility to transfer the balance of their loans from AGI to Axis Bank.

“As all Army personnel are entitled to draw pension, the borrowers can also extend the repayment period beyond their retirement, thus enabling them to borrow higher loans,” it further said.

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Reserve Bank of India – Press Releases

Press Releases

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Auction Results 91 Days 182 Days 364 Days
I. Notified Amount ₹10000 Crore ₹3000 Crore ₹7000 Crore
II. Competitive Bids Received      
(i) Number 115 88 122
(ii) Amount ₹51725.525 Crore ₹14854 Crore ₹20270 Crore
III. Cut-off price / Yield 99.1254 98.1308 96.1000
(YTM: 3.5390%) (YTM: 3.8201%) (YTM: 4.0694%)
IV. Competitive Bids Accepted      
(i) Number 11 9 61
(ii) Amount ₹9998.917 Crore ₹2999.575 Crore ₹6999.180 Crore
V. Partial Allotment Percentage of Competitive Bids 85.17% 47.29% 0.54%
(3 Bids) (1 Bid) (6 Bids)
VI. Weighted Average Price/Yield 99.1290 98.1331 96.1188
(WAY: 3.5243%) (WAY: 3.8153%) (WAY: 4.0490%)
VII. Non-Competitive Bids Received      
(i) Number 8 2 2
(ii) Amount ₹13201.083 Crore ₹0.425 Crore ₹0.820 Crore
VIII. Non-Competitive Bids Accepted      
(i) Number 8 2 2
(ii) Amount ₹13201.083 Crore ₹0.425 Crore ₹0.820 Crore
(iii) Partial Allotment Percentage 100% (0 Bids) 100% (0 Bids) 100% (0 Bids)

Ajit Prasad            
Director (Communications)

Press Release: 2021-2022/1174

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Piyush Goyal, BFSI News, ET BFSI

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New Delhi [India], November 10 (ANI): Terming the ‘Services’ sector as the key driver of India’s economic growth, Union Minister Piyush Goyal on Tuesday said that India is poised to achieve the Services Export target of USD 1 trillion by 2030.

Goyal while speaking at the ‘ Export PromServicesotion Council- Global Services Conclave 2021′ at the national capital said, “Services sector provides employment to nearly 2.6 crore people and contributes approximately 40 per cent to India’s total global exports. The services trade surplus was USD 89 billion in FY 2020-21 and it has been the largest FDI recipient.”

Lauding India’s commitment to enabling ‘work from Home‘ during the pandemic, Goyal said “While services trade remained depressed in other countries, India’s services sector showed immense resilience. Sectors like tourism and hospitality, which suffered due to COVID-19 is showing revival signs” he said.

The Union Minister also highlighted the central government’s initiatives Aatmanirbhar Bharat Package, collateral-free Automatic Loans for Businesses and MSMEs and initiatives in Skill development and said, “Rs 56,027 crore was released under various Export Promotion schemes.”

The theme of the Global Services Conclave 2021 was ‘India Serves: Exploring Potential Growth Sectors Beyond IT/ITes’.



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Submitted two names for MD and CEO to RBI: Ujjivan SFB

Banking & Finance

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Ujjivan Small Finance Bank has submitted the names of two candidates to the Reserve Bank of India for the post of Managing Director and CEO. It also expects the amalgamation with Ujjivan Financial Services to be completed in the next 12 months.

Exuding confidence that the worst is over for the lender, Carol Furtado, Chief Operating Officer, Ujjivan SFB said the bank will focus on four key areas.

“We will be focusing on improving our portfolio quality and rebuilding our business volumes. We still want to work a lot more on retaining our talent. And digital will also be a focus area,” she told BusinessLine in an interaction.

Problems aplenty

The lender has seen a lot of attrition, including the exit of its MD and CEO Nitin Chugh earlier this year, and has been facing problems of mounting bad loans.

It reported a net loss of ₹273.79 crore for the second quarter of the fiscal due to higher provisions and lower income. Gross non-performing assets surged to ₹1,712.65 crore or 11.8 per cent of gross advances as on September 30, 2021.

“We have submitted two names as per the RBI requirement within the given timeline. We are expecting a revert from their side,” Furtado said, adding that the bank has also shortlisted people for multiple positions who are expected to join shortly.

“We have a very strong internal leadership team in place who are very well capable of taking the strategy of the bank,” she further said.

Ujjivan SFB is also expecting a much better second half of the fiscal year. “The economy is turning positive and the business seems to be getting better. We have been able to strengthen our collections, we have made adequate provision and our GNPAs have also peaked,” she said.

Disbursements in the third quarter have improved and credit demand has increased.

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This Financial Stock Has A “BUY” Call From IDBI Capital With A Target Price of Rs 2000

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Q2FY22 results of Muthoot Finance

According to IDBI Capital Muthoot Finance (MUTH) reported lower growth in gold AUM at 18% YoY vs 29% YoY (Q1FY22), overall cons. AUM grew by 17% YoY; management maintained the guidance of 15% growth for FY22. Profitability growth was lower at 11% due to higher provisions. NII grew by 14.5% YoY led by a decline in margins; while PPoP grew by 17% YoY led by lower operating expenses.

The brokerage has said “Provisions of MUTH increased by 595% YoY (up 121% QoQ) due to asset quality deterioration. Stage III loan assets increased to 1.9% vs 1.2% QoQ, while the Company carries excess provision of Rs2.95bn in the balance sheet.”

Key Highlights and investment rationale for Muthoot Finance according to IDBI Capital

Key Highlights and investment rationale for Muthoot Finance according to IDBI Capital

Gold AUM growth slows down: Gold Loan AUM growth slows down to 18% YoY (up 5% QoQ) vs 29% YoY (Q1FY22) due to high base effect (32% YoY Q2FY21). Gold holdings grew by 9% YoY (up 4% QoQ) to 178 tonnes, whereas loan per 1gm of gold has increased by 7% YoY (up 1% QoQ) to Rs3,098. Management continues to guide gold loan growth to 15% YoY for FY22 on a conservative basis.

Asset quality deteriorates: Stage III loans have increased during the quarter at 1.9% vs 1.2% QoQ, which is not a cause of concern because of being backed by higher collateral. The company carries an extra provision of Rs2.95bn and an overall of Rs9.45bn (standalone business).

Margins improved sequentially: NIMs improved by 53bps QoQ to 13.46% due to a rise in yields on loans along with a decline in the cost of funds during the quarter. Similarly, spreads have also risen to 12.64% vs 12.21% QoQ.

Outlook: Given the competitive environment, management maintained guidance of 15% YoY growth for FY22. The best part in Gold finance portfolio is although NPA may inch higher; the lender can auction and recover much better as compared to other asset classes.

IDBI Capital’s take on Muthoot Finance

IDBI Capital’s take on Muthoot Finance

Muthoot Finance plans to maintain its NIMs and spreads (current NIM at 13.46% and interest spread at 12.64%) and the Gold loan AUM currently stands at INR546,821mn as of September 2021. If the gold loan volume grows per branch, OPEX will not go up proportionately (certain expenses fixed), extra staff may increase, says the brokerage’s report according to the management.

IDBI Capital has said that “We believe that MUTH with ~90% of AUM in the Gold loan portfolio has a lower risk of loss of assets versus other NBFCs. We have moved to FY24E estimates and maintained ‘BUY’ rating with a new TP of Rs.2,000 (earlier Rs.1,790), valuing it at 3x P/ABV FY24E.”

Disclaimer

Disclaimer

The above stock is picked from the brokerage report of IDBI Capital. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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Multibagger Realty Stocks With 1-Year Return Up To 2132%

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1. Radhe Developers:

This penny realty stock just a year back quoted at a price of Rs. 9 per share and now trades at Rs. 200.3, offering 2132 percent in just 1-year time frame.

The construction and contracting-housing firm is based out of Gujarat and offers residential, commercial, weekend homes & plotted projects.It has niche in various aspects like Design, Sustainability & Customer Satisfaction .The Group is currently developing an estimated million sq ft of prime real estate development and has 3 ongoing projects across Ahmedabad.

The stock’s current m-cap is Rs. 504 crore.

2. Parsvnath Developers:

2. Parsvnath Developers:

The stock of Parsvnath Developers gained 657 percent in the last one year. Its year to date return have been 256 percent.

In the previous June ended quarter the company’s sales grew 60 percent year on year to Rs. 16 crore. The company however posted net loss of Rs. 35.87 crore during the quarter, which reduced sequentially.

The stock saw a number of positives in the ongoing fiscal year including release of pledged shares, promoter buying the scrip. As of September 2021 quarter, the promoter stake in the firm has remained constant and increased from March to 69.14 percent.

3. Anant Raj:

3. Anant Raj:

Previously referred as Anant Raj Industries is a Delhi-based construction & development company formed in early 1970s.. It is also one of the largest Land Bank / Property Owners of Delhi NCR. Its Businesses include:

• Residential Townships, Group Housings

• Commercial Developments

• IT Parks

• Malls / Office Complexes

• Affordable Housings

• Data Centers

• Hospitality / Serviced Apartments.

The company stock in the last one year has surged 318% while its YTD returns have been to the tune of 177%. The company’s latest m-cap stood at Rs.2213 crore.

4. PNC Infratech:

4. PNC Infratech:

The stock quoting at a price of Rs. 337 has recorded a surge of 102 percent in the last 1-year. It is one of the premium construction company into the area of construction of highways, runways, bridges, flyovers, power transmission lines. Also the company is a ISO 9001:2008 certified company for its well defined quality system. The company has carried out the construction of high-value EPC turnkey projects.

Besides there are other small cap stocks from the space including Indiabulls Real Estate, Purvankara, Ajmera Realty, Vascon, Hubtown and Dhrun Consultancy that have reaped multibagger returns during the time frame.

Disclaimer:

Disclaimer:

Here the list has been collated only to provide the scale to which the realty stocks particularly small caps have rallied during the period. Readers should not construe it to be a call for buying in these shares.

GoodReturns.in



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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India, in the public interest, had issued directions to Independence Co-operative Bank Ltd., Nashik, Maharashtra in exercise of powers vested in it under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949 (AACS) from the close of business on February 09, 2021, the validity of which was up to November 10, 2021. These directions shall continue to apply to the bank for a further period of two months from November 11, 2021 to January 10, 2022, subject to review. The Directions stipulate certain restrictions and / or ceiling on withdrawal / acceptance of deposits. A copy of Directions is displayed at the bank’s premises for interested members of public to peruse. Reserve Bank of India may consider modifications of the Directions depending upon the circumstances. The issue of Directions should not per se be construed as cancellation of banking license by the Reserve Bank of India. The bank will continue to undertake banking business with restrictions till its financial position improves.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/1173

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