Syndicate Bank can go upto Rs 140: PN Vijay

Syndicate Bank can go upto Rs 140, says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "Syndicate Bank is on my buy list. I am assuming like most other there would be a rate cut and gradual improvement in the finances of the banks. The banks normally lead a rally, lead a fall and again lead a rally and my sense is that the banking system in India is going to probably lead another rally in the markets in the days to come with probably a steep fall in crude prices after the very good talks on Saturday between the EU and Iran and most people predicting easing up sanctions by next month. So, all that’s pointing to a definitive improvement in bank stocks."
He further added, "Syndicate Bank is as we all know is a midsized bank based in Mangalore a very, very old bank, a great tradition to banking nationalized in 1969 and if you saw the last quarter numbers they have been pretty robust. The Net Interest Margins really expanded by about 30 bps to about 3.6 which is very good for a PSU bank. They have got a good deposit base. The provisioning is at about 75%. There has not been any great slippages. In fact both the gross and net NPA levels have come down by about Rs 50-100 crore, so on the whole the balance sheet looks okay."
"If one wants to ride a possible softer interest rate scenario in the economy for the next two years Syndicate could be a fairly safe bet. In terms of valuations it’s trading of course at a very low price earnings multiplier about 3.5-4 times its 13 earnings on an adjusted book it’s trading at about 0.7. It’s trading around Rs 109 which from these valuation numbers which I put out is pretty cheap. So expecting this bank to join the rally in banks to go upto possibly Rs 140 or so in the next 12-15 months."