Dena Bank can move to Rs 100, says SP Tulsian

Dena Bank can move to Rs 100 in next six months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “In the midcap PSU banks the performance has been very pathetic. But if you take this one bank, Dena Bank I think they have improved on the earning, they have improved on the asset quality. If you see sequentially they have shown a drop of 19 bps on gross NPA, they have shown a drop of 9 bps on the net NPA and the EPS of Rs 24 which the bank has posted for FY12, Rs 7.70 came in in Q4. That gives a good confidence from the performance point of view. Generally, we measure the banks on price-to-earning and price-to-book multiples.”
He further added, “EPS was at Rs 24 for FY12, so that gives a PE multiple of 3.5. You come on historic book value at again Rs 123-124, so that translates into a price-to-book of 0.68 and if I add the Rs 25 expected EPS on the current year’s earning it gives a price-to-book of 0.5. Considering the branch network, 1,300 branches, all fully computerized and even the deposit and advances, deposit of Rs 77,000 crore, advances of Rs 57,000 crore, the kind of asset quality, this one bank I find the best amongst the midcap PSU banking which have posted the results, if you take a call on at least 8 to 10 banks. So that’s the reason in find that stock looks quite good and the stock can move to about Rs 100 in next six months or so.” Disclosure: I have no holdings in the stocks discussed.