Buy Corporation Bank; target of Rs 418: Firstcall Research
Firstcall Research is bullish on Corporation Bank and has recommended buy rating on the stock with a target price of Rs 418 in its September 8, 2012 research report.
September 11, 2012 / 11:25 IST
Firstcall Research is bullish on Corporation Bank and has recommended buy rating on the stock with a target price of Rs 418 in its September 8, 2012 research report.
"Corporation Bank Started about 107 years ago in 1906, with an initial capital of just Rs.5000/-, Corporation Bank has recorded Rs. 2,36,611 Crore mark in business and even far more, with over 6164 service outlets across the nation, served by committed and dedicated 13,000 plus Corp Bankers. It has many reasons to cheer; predominant of them is, being able to participate in nation building by empowering the rural and urban population alike. Nationalised in 1980, Corporation Bank was the forerunner when it came to evolving and adapting to the financial sector reforms. In 1997, it became the Second Public Sector Bank in the country to enter capital market, the IPO of which was over- subscribed by 13 times. The Bank has many " firsts " to its credit - Cash Management Services, Gold Banking, m-Commerce, " Online " approvals for Educational loans, 100% CBS Compliance and more recently, its pioneering efforts to take the technology to the rural masses in remotest villages through lowcost branchless banking - Business Correspondent model.""Corporation Bank net profit jumps to Rs. 3702.59 million as against Rs. 3514.53 million in the corresponding quarter ending of previous year, an increase of 5.35%. Revenue for the quarter rose 22.57% to Rs. 36506.22 million from Rs. 29783.21 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 25.00 a share during the quarter, registering 5.35% an increase over previous year period. Profit before interest, depreciation and tax is Rs. 11360.43 millions as against Rs. 9972.53 millions in the corresponding period of the previous year.”"According to the RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks', September 2011, Nationalized Banks, as a group, accounted for 52.2 per cent of the aggregate deposits, while State Bank of India (SBI) and its associates accounted for 21.8 per cent. At the current market price of Rs.374.00, the stock P/E ratio is at 3.32 x FY13E and 2.99 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 112.53 and Rs.125.07 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 9% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 29.40 x for FY13E and 28.50 x for FY14E. Price to Book Value of the stock is expected to be at 0.56 x and 0.47 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. 418 for Medium to Long term investment," says Firstcall Research report.FIIs holding more than 30% 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 
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