Buy Dena Bank; target of Rs 125: Firstcall Research

Firstcall Research is bullish on Dena Bank and has recommended buy rating on the stock with a target of Rs 125 in its November 7, 2012 research report.

“Dena Bank, in July 1969 along with 13 other major banks was nationalized and is now a Public Sector Bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Under the provisions of the Banking Regulations Act 1949, in addition to the business of banking, the Bank can undertake other business as specified in Section 6 of the Banking Regulations Act, 1949. The bank is one among six Public Sector Banks selected by the World Bank for sanctioning a loan of Rs.72.3 crores for augmentation of Tier-II Capital under Financial Sector Developmental project in the year 1995.”

“The company’s net profit jumps to Rs. 2396.40 million as against Rs. 1935.80 million in the corresponding quarter ending of previous year, an increase of 23.79%. Revenue for the quarter rose 34.28% to Rs. 21939.70 million from Rs. 16338.20 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 6.85 a share during the quarter, registering 17.90% an increase over previous year period. Net Interest Income is Rs. 7278.80 millions as against Rs. 6282.60 millions in the corresponding period of the previous year.”

“At the current market price of Rs.114, the stock P/E ratio is at 4.02 x FY13E and 3.38 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 28.37 and Rs.33.74 respectively.  Net Income and PAT of the company are expected to grow at a CAGR of 29% and 25% over 2011 to 2014E respectively. On the basis of Debt Equity Ratio, the stock trades at 17.64 x for FY13E and 16.43 x for FY14E. Price to Book Value of the stock is expected to be at 0.76 x and 0.62 x for FY13E and FY14E respectively. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘buy’ in this particular scrip with a target price of Rs. 125 for medium to long term investment,” says Firstcall Research report.

Non-Institutions holding more than 90% in Indian cos

Disclaimer: 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.

To read the full report click on the attachment

Read More