Buy Bank of Maharashtra; target of Rs 56: Magnum

Magnum is bullish on Bank of Maharashtra and has recommended buy rating on the stock with a target of Rs 56 in its May 30, 2012 research report.

“Bank of Maharashtra, operating profit for FY 2011-12 increased to Rs. 1515.24 crore compared to Rs. 855.03 crore for FY 2010-11 with a growth rate of 77.21%. Net Profit for FY 2011-12 stood at Rs. 430.83 crore as compared to Rs. 330.39 crore for FY 2010-11 recording a growth rate of 30.40%. Recommend BUY with Target Price of Rs 56.00.”

“Operating Profit for Q4FY12 increased to Rs. 249.99 crore as against Rs. 65.86 crore for Q4 of FY2010-11 recording a growth rate of 279.58%. Net Profit for Q4 of FY2011-12 is at Rs. 72.83 crore as against Rs. 69.41 crore for Q4 of FY2010-11 registering a growth rate of 4.93%. Net Interest Margin (NIM) for Q4FY12 improved to 3.17% from 3.13% in Q4FY11.”

“Bank of Maharashtra is currently trading at attractive valuation and the Bank is all set to report sound earnings going forward considering the Asset Quality and slippages. Management is confident for cash recovery in the NPA category and even expects credit growth of 20% by March 2013 hence we have raised our estimates by 7% for FY13- 14. At CMP of Rs 49, the stock is trading at par valuation of PE of 4.0x of FY13E EPS and at an adjusted P/BV of 0.74x FY13E BV (its 5 year range of 0.7x1.2x). We have valued the Bank at P/BV of 0.88x FY13E & maintain our BUY rating on the stock with a target price of Rs 56 with an upside potential of 14% from current levels,” says Magnum research report.   

Bodies Corporate holding more than 50% in Indian cos

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