Short Term Buy Call For Indian Bank

Stock Market Analyst Ashwani Gujral has recommended a ‘BUY’ on Indian Bank with a 3-4 months target price of Rs 320.

Today, the stock opened at Rs 225 as against its last closure at Rs 226.95 on BSE. Current P/E and EPS is 9.76 and 23.33 respectively. The stock has seen a 52-week high of Rs 256 and a low of Rs 77 on BSE.

Mr. Gujral said that Indian Bank’s steady improvement in its profitableness is because of bettering interest spreads, consistent improvement in its asset quality by curtailing fresh NPA generation and stable growth in higher-yielding credit portfolio, make the stock extremely lucrative.

The bank has registered superb results for the quarter ended Dec 07. The total interest earned stood at Rs 13,754.1 million against Rs 10,544.4 million recorded in the corresponding quarter in the previous year, showing a whopping development of 30.43% on YoY basis.

The bottomline of the bank has seen a sharp increase during the quarter. The net profit after tax (PAT) stood at Rs 3,075 million against Rs 1,904.70 million posted in Q3FY07, up by 61.44% on YoY basis.

The development on QoQ basis also remained strong at 24.19%. The net profit margin for the three months period ended Dec 07 stood at 22.36% much higher than the previously posted NPM of 18.06%. The capital adequacy ratio (CAR) has bettered to 13.51% against the year ago level of 12.29%, although it saw some pressure on QoQ basis. The net interest margin has increased from 3.25% to 3.73% in the present quarter. The earning per share (on TTM basis) comes out to Rs 23.33.

Some other banking stocks that looks good for short as well medium-term trading includes SBI, PNB and Bank of India.

Tagged with