Feb 16, 2017 01:19 PM IST | Source: Moneycontrol.com
Hold Allahabad Bank; target of Rs 70: Edelweiss
Edelweiss recommended hold rating on Allahabad Bank with a target price of Rs 70 in its research report dated February 14, 2017.
Edelweiss' research report on Allahabad Bank
Allahabad Bank’s (ALBK) Q3FY17 PAT of INR 753mn belied our estimate, on muted revenue momentum despite stable asset quality. Revenue momentum was tepid with NII slipping >16% YoY (on below-industry loan growth and weak NIM), which also strained core profitability. Asset quality was steady, with slippages restricted to INR 16.5bn, and GNPLs at INR 191bn (flat QoQ).
On operational front, we anticipate ALBK’s competitive prowess to be hampered by diversion to clean up coupled with capital constraints (which may not be forthcoming for mid-size PSU banks). Hence, we expect operating profitability to remain under pressure. Maintain ‘HOLD’.
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