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Allahabad Bank
Improving franchise at inexpensive valuations; initiate with OUTPERFORM
We initiate coverage with OUTPERFORM and price
target of Rs270 based on 1.4x FY12E P/BV.
At the current valuation of 1.2x FY12E P/BV, Allahabad
Bank trades at a discount to other bank stocks.
While the bank has a high proportion of savings
deposits at 27% of total deposits, it trades at a discount
to other banks due to its weaker technology platform
and perception that its loans carry higher NPL risks.
We expect the stock to trade higher given likely good
earnings performance and with slippages under control.
Visit http://indiaer.blogspot.com/ for complete details �� ��
Allahabad Bank
Improving franchise at inexpensive valuations; initiate with OUTPERFORM
We initiate coverage with OUTPERFORM and price
target of Rs270 based on 1.4x FY12E P/BV.
At the current valuation of 1.2x FY12E P/BV, Allahabad
Bank trades at a discount to other bank stocks.
While the bank has a high proportion of savings
deposits at 27% of total deposits, it trades at a discount
to other banks due to its weaker technology platform
and perception that its loans carry higher NPL risks.
We expect the stock to trade higher given likely good
earnings performance and with slippages under control.