Andhra Bank Strong profit but slippages may haven risen ACCUMULATE ::Emkay

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Andhra Bank

Strong profit but slippages may haven risen

ACCUMULATE

CMP: Rs137                                        Target Price: Rs150

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n     Andhra Bank’s NII well above our estimates at Rs9.1bn; PAT at Rs3.9bn was up 20% yoy on back of lower provisions. However, gross NPAs saw sharp increase of 18% qoq

n     Adjusted NII at Rs9.3bn was up 27% yoy. NII growth aided by strong 6% sequential growth in loan book. The reported NIMs were up 8bps qoq!!!

n     Asset quality deteriorated further; credit costs at 0.15% appear low. Large exposure to problemtic sector of MFI and power remains area of concern

n     Though concerns remain on asset quality valuations at 0.9x FY13ABV and div yield of 5% will work as support. Maintain ACCUMULATE with target price of Rs150