Ambit Capital keeps BUY on Andhra Bank

Ambit Capital keeps BUY on Andhra Bank
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First Published: Tue, Feb 03 2009. 11 53 AM IST

Updated: Tue, Feb 03 2009. 11 53 AM IST
Andhra Bank’s Q3FY09 results were broadly in line with expectations. Net interest income clocked in at Rs4.5 billion as against Rs3.7 billion during the corresponding quarter last year, a growth of 22% y-o-y.
Buoyed by treasury gains and higher fee-based income, operating profit grew 27% y-o-y, from Rs2.93 billion during Q3FY08 to Rs3.73 billion during the quarter under review.
A reversal in MTM provisioning made during H1FY09 boosted the bank’s bottomline by 30% y-o-y to Rs2.13 billion from Rs1.64 billion during the corresponding quarter last year.
At Rs56, the stock trades at 0.8x and 0.7x our FY09E and FY10E ABVPS estimates. Given a strong operational performance and sustenance of a superior asset quality in a difficult quarter, we maintain our BUY recommendation on the stock with a revised target price of Rs100 (earlier Rs102).
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First Published: Tue, Feb 03 2009. 11 53 AM IST
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