Mar 25, 2013 11:01 AM IST | Source: CNBC-TV18

Bank of India can move to Rs 340: SP Tulsian

Bank of India (BOI) can move to Rs 340 in about six months, says SP Tulsian,

Bank of India (BOI) can move to Rs 340 in about six months, says SP Tulsian,

Tulsian told CNBC-TV18, "I am taking a positive view on the banking and financial stocks because of these foreign cues, which we are getting like settlement of Cyprus matter. The banking and financial stocks probably will remain in focus for next eight-ten days. It is heading towards its 52-week low and generally that is the time because I have recommended Canara Bank four-five months back also when it was ruling at its 52-week low at Rs 320 or so and it moved to Rs 520 just in a couple of months or so."

He further added, "Generally, I think when you have the extreme pessimism getting built on any of these public sector undertaking (PSU) banking stocks, probably that is a right time to enter. Going by the advance tax number, which bank has paid 80 percent higher for Q4 that also indicates that working is likely to be good."

"They have a good presence, they have 4,150 branches, 1,800 automated teller machines (ATMs) and if you see their deposits, Rs 3.5 lakh crore, advance is Rs 2.8 lakh crore and going by the 9-months working, the expected earnings per share (EPS) is likely to be Rs 48 for FY13."

"The dividend payout also has been quite good. Last year it was 70 percent, one can expect it to be about 75-80 percent for the current year. Again on a price to book, it is ruling at 0.8, so price to earnings (P/E) of 6 times and price to book at 0.8, already the book value of Rs 360 can be expected as on March 31, 2013."

"So, taking all this into consideration, though it is heading towards 52-week low, I do not think that much downside is seen here. Those who keep a time horizon of about six months can look for a price of Rs 340 or so."

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