Buy Karnataka Bank, says SP Tulsian

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Buy Karnataka Bank, says SP Tulsian

Buy Karnataka Bank, says SP Tulsian of sptulsian.com.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Karnataka Bank See messages about Karnataka Bank

Buy Karnataka Bank , says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "Karnataka Bank is probably the cheapest bank in the private sector banking space. If I first take a call on price to book it is at 0.55. The financial performance has not been bad because on the absolute number for first half, the bank has posted a PAT of about Rs 91 crore which was at Rs 75 crore on the corresponding quarter of the previous year. But because of some equity dilution close to about Rs 190 crore the EPS is slightly lower at Rs 4.85 for first half against Rs 5.50 for the same period last year."

He further added, "Taking an overall call, I think this looks to be good valuation that takes any bank having 478 branches, about 250 ATMs and if you see the overall financial performance, I don't think there is going to be big negative seen in the financial performance except there has been increase in the net NPA to about 2.22% which was at 1.62% on March 31, 2011. But I don't think that can really be the reason for hammering or beating down the share to price to book of 0.55 which I am taking as of September 30, 2011."

"If you see the shareholding pattern 70% of that is held by the institutional investors and HNIs. There was talk in the past that this is seen as a takeover candidate and in fact now also normally we get to hear that 2 or 3 people are eyeing this bank because of the concentrated shareholding, which I said of about 70%."

"Taking all this into consideration and considering that probably banking sector has seen its worst and from here on all we get to hear that we are going to get positive news for this sector, probably this is looking a good buy. And if somebody can keep a view of about 6-8 months, I won't be surprised to see the share reaching three-digit mark."