Visit http://indiaer.blogspot.com/ for complete details �� ��
1.3x FY2012E
CMP : Rs258
RECO : BUY
TP : Rs300
Investment Rationale
§ Healthy CASA proportion to help in rising rate scenario: The bank’s CASA mix which stands at a healthy
34.2%, will help bank to get better margins than peers in the current rising rate scenario.
§ Robust asset quality: The bank’s asset quality is comfortable with gross and net NPAs at 1.5% and 0.4%
respectively. The restructured assets portfolio is also performi ng well, as the proportion of restructured assets to
total advances came down significantly to 4.2% in June 2010.
§ Superior Cost/Income (C/I) ratio: The bank C/I ratio, which reflects the operating efficiency of the bank, is
38.7%, one of the lowest among the peers.
Valuations
§ At the CMP, the stock is quoting at 1.7x FY11E ABV and 1.3x FY12E ABV with a likely average RoE of 20.6%
over FY11-12E
No comments:
Post a Comment