Andhra Bank looks cheap: SP Tulsian

Andhra Bank is looking cheap amongst all the PSU banking stocks, says Investment Advisor, SP Tulsian.

Tulsian told CNBC-TV18, "Andhra Bank has posted quite good numbers. If I take the FY11, I am not going by the quarter wise break-up of the performance, but if I take the FY11 performance on a fully diluted equity, which has in fact increased by about Rs 75 crore from Rs 480 to about Rs 560 crore because government of India has subscribed to Rs 7.5 crore at Rs 157 per share in the March quarter, so on this fully diluted equity the bank has posted an EPS of close to Rs 22.65 for FY11."
He further added, "If I go by the same performance because this Rs 1200 crore will be increasing the earnings of the company in FY12. If I take the FY12 performance factoring the likely performance for FY12 with EPS of over Rs 25 or Rs 26, the share is ruling at a PE of close to 5 and price to book of 1. So I do not think with a bank of having branch of 1650 this can be considered as a mid-size PSU bank with 1650 branches and share available at a PE multiple of 5 and price to book of 1 can be considered expensive. Considering the expected growth in the performance for FY12, I think the share looks quite good and cheap amongst all the PSU banking stocks available."