Critical points:
- One man show, ain't an organization
- Well not anymore. 3 key men inducted onto the Board - Rajat (can easily take pants off the gazillion analysts, great banker); Pralay (lays retail question to rest)
- Promoter is the most aggressive and has a super track record of execution - so much so that all the big wigs in the banking firmament stand up and clap
- Don't understand retail banking
- retail has gone from nothing to 39% of the book (including CASA)
- clocking 1000 crores per quarter in SA; branch count is 500 and ATM count is 2 x that
- Branches are understaffed - does it really matter?; as long as they can get new gen kids who can do online transactions or Babus, who don't visit branches
- Asset quality will show lumpiness
- NNPAs of 0.03% - it is gravity defying - so what if it goes up a bit?
My bet:
Valuations are at the bottom or some where there
Cycle - I don't have a clue whether RBI is increasing rates with short term focus or longer term focus - What ever, the case may be reducing currency volatility at the cost of interest rate volatility is futile as last two cycles demonstrated!
Two year call - lets revisit in 2015
- NIM stays above 3.0%
- CASA stays above 25%
- Fund raise successfully completed
- Overall - the bank will be in the top decile compared to other banks!
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