Let us begin by talking about ’s numbers in greater detail. All in all, it was a fairly decent quarter in line with Street expectations is how we are categorising it but you have the deposit growth which came in as a bit of a lag. Is that going to be a bit of a concern?
The overall numbers look good. They were above estimates, mainly the beat was due to the higher NIMs expansion and also if we look they have scaled up the contingent provisions which was a key positive. In terms of key negative which you have highlighted that the deposit mobilisation moderated bit on YoY basis as well as on a quarter-on-quarter basis. So key monitorable going forward should be the deposit mobilisation and also the operating leverage because the bank has given strong outperformance in recent years. Further rerating is unlikely if the growth moderates from here in coming quarters. Because if we look at the credit deposit ratios also, it is hovering at the higher end on the channel. So key monitorable here would be around the deposit mobilisations.
So all the numbers that we have from the private sector banks can I ask you what are you folks at BNP Paribas now talking about when it comes to which of these banks can have the next significant upside in the stock markets; we have talked a lot about the ICICI Bank leadership; we have been waiting for the elephants to dance which are the twins, it has started to happen; and one should remember that in the run up to this earnings season what you had really seen was a lot of action for the public sector banks share price but now post the results a rerating for which ones?
Basically from one to two years perspective in the last two years or three years cycles we have seen ICICI Bank outperforming in terms of private banks so in next two years cycles we believe that HDFC Bank and Kotak Bank will be the outperformers.
Once the smooth transitions and the dispensation are received from the RBI, you would see certainly the rerating happening in
also. If we look at near-term focus, it would be on the transition on Mr Uday Kotak who would be retiring. Once it is out, you will see stock outperformance because they both have underperformed in last two to three years’ timeframe. So, we believe that you will get market return in terms of ICICI Bank but outperformance is unlikely going forward in ICICI Bank. In terms of PSU banks also, the same is that in top tier PSU you will get market returns but you will get outperformance in the lower end of the PSU banks like , , etc.
