Lakshmi Vilas Bank can move to Rs 135: SP Tulsian

Lakshmi Vilas Bank can move to Rs 135 in next six months or so, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Lakshmi Vilas Bank has 292 branches, eight extension counters and they have presence in 15 states with predominance more in Tamil Nadu. The bank has the identified promoter who are holding about 11% stake in the bank. I am again seeing this more as M&A play that once the RBI guidelines will come out on the banks, on the bank licensing then again we will be seeing the renewed buying interest coming back into this bank."
He further added, "The only problem with the bank is that they have a little higher NPA. If you see the net NPA, it is closer to about 3%; to be precise it is 2.95%. But if I go by the book value parameter, the book value is closer to Rs 90, so it is ruling at a price to book of about 1.25."
"The financial performance also has been reasonably good. They posted an EPS of close to about Rs 4.40 for first half of FY13, low equity base of less than Rs 100 crore. If you take the market cap of the bank, it is closer to about Rs 1,100 crore which translates into the value per branch at Rs 3.7 crore. So taking all this into consideration, I think if you see this as a M&A or even if the re-rating happening on this private sector banking stocks because there are very few banks which have a market cap of less than or closer to about Rs 1,000 crore. You can count them on fingers, maybe three or four banks with a very low branch networks and all that. But since they have a reasonable branch network of about 300 branches and with per branch value of Rs 3.6-3.7 crore per branch, I think the stock looks quite interesting and can move to about Rs 135 in next six months or so."