KRChoksey has maintained its hold rating on Bank of India, with price target of Rs 360, in its research report.

“Bank of India’s Q4FY09 results were broadly in line with expectations with Net Profits decreasing 7% q-o-q to Rs 757.1 crores. At current price of Rs 344 the stock is trading at 1.2x FY10E P/BV. We maintain a hold on Bank of India with a target of Rs 360, giving an upside potential of 5% from the current levels, due to: 1) low valuations (1.2 FY10E BV/s) compared to public sector banking peers; 2) MTM provisions will be written back in subsequent quarters as credit market improvement continues; 3) moderating business growth (18- 20% advances growth expected in FY10) will be positive as it will allow management to focus on asset quality and improving funding mix; 4) stabilizing NIMs 3% as high cost differential interest rate deposits run off or are repriced in next two quarters and CASA ratio of 35% is achieved in H2FY10; 5) strong traction in non interest income (core fee income + forex); 6) asset quality headwinds will likely subside as economy improves. Downside risk to our view include: 1) higher than expected slippages (proportion of restructured loans at 3.5% higher than most PSBs),” says KRChoksey’s report.

source: Moneycontrol

Tags: bank of indiak, buy or sell BOI, hold rating, india shares, KRChoksey tips, nse bse tips, share market

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