Cup and Handle Breakout supported by Fundamentals

3 Mei

FY24 EPS 21.11(Q4 EPS 6.4), PE 10 and Book value is 170 and PB 1.25

From Q1 of FY25 the company will post min EPS of Rs 6.4/Qtr, even if we consider 25% growth its annual EPS would be 6.4*4*1.25 = 32 Rs/share

FY25 valuation at CPM of 212 would be EPS 32, PE 6.6, Book value 200 and PB 0.94

therefore as per FY25 estimation minimum price at which it must trade would be,
1.5 times PB = 300 (200*1.5)
10 times PE = 320 (32*10)

Target 1 = 246
Target 2 = 310

Q4 results ,
G.NPA would be 242cr vs 223cr (2.8% vs 3.06%)
N.NPA would be 92cr vs 102cr (1.4% vs 1.42%)
Provision would be 150cr vs 121cr (PCR - 62% vs 54%)

19 Mei

Nota

Q4 EPS is 5.73 vs my projection of 6.4
Reason: Higher Provison 47cr vs my estimate of 40cr (EPS impact 0.66 Rs)
GNPA 242cr (2.94%), NNPA 70cr (0.86%), PCR 71%

FY25 Q1 Estimates
NII + Other income 350cr
-Cost to Income 210cr (60%)
+Insurance claim 25cr
PPOP 165cr
-Provisions 25cr
PBT 140cr
-Tax 35cr
PAT 105cr
EPS (105/10.62) 9.9Rs/share

Pros:
1. During Q1 the company has high chances of receiving back 25 to 30cr worth of insurance claim under CGFMU scheme ((40cr-3%)*72.5%)
2. 59% of unsecured book is covered under this CGFMU schem, hence the company has 22.5% risk upto 750cr default (8500cr*41%*15%) which will be received back (72.5% of NPA) by the company as Insurance claim once in a year

considering the above factors it is safe to assume minimum PAT of Rs 400cr ( 37.66Rs EPS) for FY25 this is a must investment stock with base target of 300Rs

1 Jul

Nota

Q4 24 Q1 25 Q2 25 Q3 25 Q4 25
CMP Movement 190.00 220.00 250.00 270.00 300.00
PE 9.34 9.50 9.65 9.56 10.00
PB 1.1 1.24 1.35 1.40 1.50
Book Value 170.00 177.30 184.80 192.50 200.00
TTM EPS 20.34 23.16 25.92 28.23 30.00

3 Ogo

Nota

In Q1 the Bank has made CGFMU Insurance claim of Rs 45cr and received 73% ie 32cr as expected

Further in Q2 of FY25

Bank has proposed to claim 36cr as ECLGS claim
Advances 9700-9800cr
GNPA 2.5% (ie 244cr)
NNPA 0.5% (ie 46cr)
PCR 80-82%
Total Income 375cr
PPOP 150cr