Sharekhan's research report on Bank of India
The stock continues to outperform on the back of sustained improvement return ratio profile aided by strong asset quality trends. Strong sector tailwinds are supporting overall performance. RoA in H2FY2024 is expected to reach ~1.0% and is likely to sustain in the near to medium term. The bank has been highlighting that the quality of loans sanctioned/disbursed in post-COVID times is far superior with very low delinquency. Thus, lower slippages trend is likely to sustain and narrow the perceived gap in underwriting with respect to peers.
Outlook
At CMP, the stock trades at 0.7x/0.6x its FY2025E/FY2026E ABV estimates. We maintain a Buy with a revised PT of Rs. 135, rolling forward our valuation to FY2026E.
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