Limited downside in Punjab & Sindh Bank: Tulsian

Limited downside in Punjab & Sindh Bank, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "I like Punjab and Sindh Bank. I have taken a pure fundamental call because last month when this bank went public, there was huge and tremendous response. This bank is having more than 50% branches in Punjab with branch network of close to 950." He further added, 'If I take price to book, it is ruling at slightly below 1, maybe at 0.95-0.96. Purely going by the fundamentals, if I compare this bank with the comparable peers like Dena Bank or Bank of Maharashtra or maybe United Bank of India, which are more the state centric play, all these banks have a earnings per share (EPS) of close to about Rs 12-15, whether you talk of Bank of Maharashtra, United Bank of India, Dena Bank, but this bank is likely to have an EPS of Rs 25 for FY11. In fact this bank does not have much exposure or very miniscule exposure to the reality sector and maybe the micro finance sector which also has been the concern off late." "If I go by the growth prospects or even by the asset quality, they have the net non performing asset (NPA) of less than 0.5% and gross NPA of less than 1%. So, I am quite hopeful that maybe for FY12 the bank should be able to post an EPS of maybe more than Rs 25, though the same EPS is likely for FY11, but the same trend is likely to continue even if we see 10-12% growth, they should be able to have a Rs 28 EPS." "Going by these parameters, price to book of less than one on the historic earning and PE of less than 5, I don