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Last Updated : Jul 27, 2012 12:56 PM IST | Source: Moneycontrol.com

Angel Broking neutral on Bank of Maharashtra

Angel Broking has maintained neutral rating on Bank of Maharashtra, in its July 23, 2012 research report.

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Todays L/H

Angel Broking has maintained neutral rating on Bank of Maharashtra, in its July 23, 2012 research report.

“During 1QFY2013, Bank of Maharashtra reported 15.1% growth in net profit to Rs140cr, which was mainly aided by tax write-back of Rs16cr compared to tax expense of Rs69cr in 1QFY2012. At the PBT level, the bank witnessed a decline of 34.8% yoy to Rs125cr, on back of 41.1% yoy increase in provisioning expenses to Rs316cr.”

“The bank reported healthy growth in its business, with advances witnessing a growth of 22.7% yoy and deposits registering a growth of 17.4% yoy. CASA deposits remained flat on a sequential basis, as 3.6% qoq growth witnessed in saving deposits was fully offset by 10.1% sequential decline registered in cyclical current deposits. Consequently CASA ratio for the bank declined on a sequential basis by 175bp to 39.6%. The reported NIMs for the bank declined by 26bp qoq to 2.9% due to 19bp sequential decline in the yield on funds and 7bp qoq increase in costs of funds. Non-interest income (excluding treasury) declined by 6.0% yoy. Treasury income for the bank came in at Rs24cr during the quarter as against Rs9cr in 1QFY2012, while recoveries from written off accounts came in at Rs22cr compared to Rs16cr in 1QFY2012. On the asset quality front, Gross NPA ratio came sequentially lower at 2.2% compared to 2.3% in 4QFY2012. However, Net NPA climbed to 1.0% from 0.8% in 4QFY2012. The slippage ratio for the quarter remained elevated, much above the comfortable 1-1.5% levels at 3.1% (average slippages of Rs452cr for the last two quarters compared to average of Rs198cr since 1QFY2011). PCR for the bank dipped by 103bp, but still remains comfortable at 79.3%.”

“At the CMP, the stock is trading at valuations of 0.6x FY2014E ABV, which we believe factors in expected 30.4% CAGR in earnings over FY2012-14E. Owing to the asset quality concerns arising due to weak macro-economic outlook, we recommend Neutral rating on the stock,” says Angel Broking research report.   

Non-Institutions holding more than 90% in Indian cos

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To read the full report click on the attachment  

First Published on Jul 27, 2012 12:47 pm