Lakshmi Vilas Bank may give 30-35% return in next 6-8 months time, says SP Tulsian, Investment Advisor.
Tulsian told CNBC-TV18, "Lakshmi Vilas bank looks a good bank amongst the private sector because this bank is having about 273 branches in 16 states with focus largely on the southern part of India. If you go by the financial performance for FY10 because of the larger provisioning of the bad loans, the bank had posted an EPS of less than Rs 5, but if we go by the present financial performance and the bank having posted results for first 9 months the EPS stood at Rs 7.55 and infact there has been sharp improvement in the recovery of the NPA, net NPA which was over 4% as on March 2010 has reduced to about 2% as on December 2010 and the focus has been of the bank on providing good quality loans as well as the recovery of the loans and even the present book value of the stock is close to about Rs 85."
He further added, "The EPS for FY11 is likely to be over Rs 10 while FY12 is going to be very good year for the bank and it wont be surprising to see an EPS of close to about Rs 14-15 if we go buy the present financial performance and the quality and the focus of the bank mainly on the lending. So the stock has the capability of giving about 30-35% return in next 6-8 months time."
