Buy Bank of India; target of Rs 130: Sharekhan

Sharekhan is bullish on Bank of India has recommended buy rating on the stock with a target price of Rs 130 in its research report dated November 12, 2024.

Broker Research

November 14, 2024 / 12:52 IST

Buy

Sharekhan's research report on Bank of India

Core operational performance was weak, led by muted NII driven by higher-than-expected NIM compression and higher opex growth (led by employee retiral provisions) despite healthy loan growth (~16% y-o-y). Core PPoP (ex. treasury gains) declined by 7% y-o-y. Although, higher other income (mainly led by treasury gains & recovery from written off accounts) along with lower tax expense led to a significant beat in earnings resulting in RoA at ~0.9%. Slippages were higher at 1.7% annualised vs. 1.3% q-o-q/ 1.3% y-o-y, led by corporate and agri loans, thus core credit cost was higher at 97 bps vs. 85 bps q-o-q and 54 bps y-o-y annualised.

Outlook

We maintain BUY with a revised PT of Rs. 130, given stable outlook ahead. Valuations are cheap; however, it will be lower in our preference order in lower tier PSU banks due to higher volatility in performance. The stock trades at 0.7x/0.6x its FY2025E/FY2026E ABV estimates.

For all recommendations report, click here