DBS GROUP HOLDINGS LTD
D05.SI
DBS - Approval For Indian Operation
- DBS announced that it has secured approval from the Reserve Bank of India (RBI) to convert its Indian franchise into a wholly-owned unit. DBS intends to open about 75-90 branches in India in the coming years.
- We expect this move to be long-term positive for the DBS as it strengthens its presence in this market.
- Indian banks such as State Bank of India and HDFC Bank have seen significant jump in market capitalization in the past few years. For example, HDFC Bank’s market capitalization grew by a CAGR of 27% from FY2014-FY2017, while its net income grew from INR87.4b in FY2014 to INR152.5b in FY2017 or a CAGR of 20%.
- Post results and with the current weak sentiment for oil and gas stocks, DBS’s share price has taken a hit and has fallen from a recent high of S$22.25 to the current price of S$20.35.
- While we have a HOLD on the stock with a fair value estimate of S$22.50, we mentioned in our last report (See report: DBS Group - Outlook Is Healthy, But Some Challengers Remain) to accumulate at S$21.00 or lower and the current price weakness presents a good opportunity to re-enter this stock.
Carmen Lee
OCBC Investment
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http://www.ocbcresearch.com/
2017-09-05
OCBC Investment
SGX Stock
Analyst Report
22.500
Same
22.500
