Buy Dena Bank; target of Rs 114: Nirmal Bang

31535 Investors following Dena Bank. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy Dena Bank; target of Rs 114: Nirmal Bang

Nirmal Bang is bullish on Dena Bank and has recommended buy rating on the stock with a target of Rs 114 in its February 8, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Ipca Laboratories; target Rs 406: Dolat Capital ALSO READ See previous views by Nirmal Bang See what other Experts & Brokerages are saying about Dena Bank See messages about Dena Bank Dena Bank BSE | NSE 01/06/12 Are Mutual Funds betting on Dena Bank?

Nirmal Bang is bullish on Dena Bank and has recommended buy rating on the stock with a target of Rs 114 in its February 8, 2012 research report.

"Dena Bank's performance for Q3FY12 was good and broadly in line with expectations with growth in both NII and other income. The bank reported a net profit of Rs 186.7 crs in Q3FY12 resulting in a growth of 20.3% on a YoY basis and a QoQ decline of 3.6%. Although the bank reported comfortable NPA levels, we believe that the banks restructuring book is a cause of concern in the near term."

"Dena Bank's loan book grew at 15.7% YoY. However on a sequential basis loan book showed high growth of 11.2%. Management expects to sustain loan growth of 20% going forward. Net Interest Margin (NIM) stood at 3.33% in Q3FY12, as compared to 3.22% in Q2FY12 and 3.27% in Q3FY11. Strong CASA ratio and high growth in advances sequentially helped the bank to maintain higher NIMs. Other income grew at 5.7% YoY. However, it surged during the quarter by showing a QoQ growth of 18.1% and stood at Rs 134 crore. We expect other income to be stable at current levels. Gross NPA ratio stood at 1.85% while Net NPA ratio came at 1.10%, sequentially lower by 8bps and 5 bps respectively. However, the bank's restructured book increased by ~Rs 600 crore and stood at around Rs 1,800 crore (4.0% of advances). Management sees some more stressed accounts coming up for restructuring in the next quarter."
 
"Comparatively stable NIMs, traction in core fee income are likely to boost Dena Bank's core operating performance which in turn will help the bank to register stable return ratios going forward. There are some near term concerns on the banks restructured book. Provisions are expected to remain higher in the current quarter. However, the banks restructured book (4% of total advance book) stands comparatively lower than the other public sector banks which we believe reflects strong performance. Dena Bank is currently trading at a very attractive valuation amongst the banking business space. At CMP, the stock is trading at 0.74x and 0.62x FY12E and FY13E Adj BVPS respectively. We maintain our BUY rating on the stock with a target price of Rs 114," says Nirmal Bang research report. 

Public holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment