Dhanlaxmi Bank can go upto Rs 66-70: Tulsian

SP Tulsian, sptulsian.com is of the view that in Dhanlaxmi Bank one can keep target of Rs 66-70.

Tulsian told CNBC-TV18, “I have a very strong hold or maybe the positive call on this stock for the simple reason. First, let me give the negatives that in the last two months you have seen all type of problems rising non-performing assets (NPA), no branch expansion, and no increase in the business. The advances and deposits are all at a stagnant level. But inspite of that they have 275 branches and majority of them are all tech savvy or fully tech compliant.
“So if you really go by the present market cap of Rs 500 crore you are getting the valuation of per branch at less than Rs 2 crore while the other branch in the similar space like South Indian Bank or maybe Karnataka Bank they are all ruling at the valuation of Rs 6-8 crore per branch. So definitely this seems to be fit case of Mergers and Acquisitions (M&A) play, very soon we are going to see the banking guidelines coming in and at that time definitely there will be rush to acquire this banks also.”
”I don’t think that downside is much from hereon. Whatever downside we have seen has come into the stock since he has a time horizon of six months he should look for a price target of about Rs 66-70. He should keep that price target in his mind because whenever we see the stock moving up – it swiftly moves up to those level. One should not feel that how can the stock move to those levels in such a short time, which is possible. So keep a time horizon of six months with a price target of anywhere between Rs 66-70.”