Hold Dena Bank; target of Rs 108: Nirmal Bang
Brokerage house Nirmal Bang has recommended hold rating on Dena Bank with a revised price target of Rs 108, in its May 16, 2013 research report.
Nirmal Bang's research report Dena Bank
"Dena Bank's performance for Q4FY13 was significantly below expectations. The bank disappointed on most of the parameters like de growth in Net Interest Income; increased provisions and stress on asset quality. Asset quality deteriorated in the quarter with slippages of Rs 401 cr much higher than the average run rate of the bank witnessed in the past (Rs 230-250 cr). So far, barring the current quarter, Dena Bank had been a much resilient player in the last one year when the entire banking industry was facing significant stress on asset quality. What needs to be watched out is that whether this quarter was an aberration in line with industry trend or much more stress is underlying for which we would need to wait for another quarter performance. Despite a temporary blip in the earnings; Dena bank still stands as a relatively better player compared to its peer group in terms of lower GNPA, provision coverage ratio, control over operating costs, lower bulk deposit ratio (13 percent in Q4FY13) and stable return ratios. We believe that the stock may remain an underperformer in the near term; till the concerns on the asset quality gets some clarity. At CMP, Dena Bank is trading at a PE of 3.78x and 3.22x of FY14E and FY15E EPS and at an adjusted P/BV of 0.75x and 0.65x FY14E and FY15E Adj BV. We continue to maintain our hold rating with a revised target price of Rs 108 (0.85x FY14E Adj BV) indicating an upside of 13.4 percent from current levels," says Nirmal Bang research report.Also Read: Buy Dena Bank, Sun Pharma Advanced Research: SP TulsianDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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