Accumulate Corp Bank, target of Rs 468: Angel Broking

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Angel Broking has come out with a research report on Corporation Bank 's Q2FY10 earnings. The research firm has maintained an accumulate on the stock, with a target price of Rs 468, implying an upside of 9%, in its report dated November 6, 2009.

"Corporation Bank's relatively small, regional and urbancentric operations temper its growth outlook, on the key competitive parameters of CASA and Fee Income. Recognising and acknowledging the higher competitive pressures that the Bank faces because of its urban-focus, the management is explicitly targeting branch expansion in smaller towns. Yet, in the medium term, a meaningful change in its competitive standing is unlikely, capping the valuation multiple that the bank can command. However, within mid-cap PSU Banks, we prefer the Bank due to its efficient operations, reflected in low Operating expenses as a % to average Assets, healthy Asset quality, and proactive Investments in modern distribution and payment systems (relative to its peers). At the CMP, the stock is trading at 5.0x FY2011E EPS of Rs84.6 and 0.9x FY2011E Adjusted Book Value of Rs 468. We value the bank at 1.0x FY2011E ABV. We maintain an accumulate on the stock, with a target price of Rs 468, implying an upside of 9%", says Angel Broking.

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To read the full report click on the attachment.........