Arihant capital markets has recommended a neutral rating on Bank of Maharashtra with a target price of Rs 38, in its research report dated August 18, 2015.
Arihant capital markets' research report on Bank of Maharashtra
Bank of Maharashtra Q1FY16 numbers were below our estimates. Bank performed deficiently on account of provisions & contingencies. NII increased by 11.9% on YoY basis. Other income increased by 7.6 %. However, quality of assets deteriorated with most of the NPAs coming from small borrowers which is a cause of concern.
Outlook: We have became cautious on Bank of Maharashtra post its first quarter (Q1FY15) results due to deteriorating asset quality. We have assumed Advances as well as deposits to grow by 11% in FY16. At CMP of Rs 36 the bank is trading at 0.57x its FY16 ABV of Rs 63. We have Neutral rating on the bank with a price target of Rs 38 based on 0.6x P/ABV FY16E, say Arihant capital market's research report.
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