Wednesday 12 November 2008

Buy Andhra Bank, target of Rs 96: Karvy

Karvy Stock Broking has maintained its buy rating on Andhra Bank with a target of Rs 96 in its November 12, 2008 research report. "In 2QFY09, Andhra Bank reported net interest income growth of 34% (Y/Y) to Rs 4.3 billion. Due to expansion of core banking solution and provisions of Rs 200 million towards wage revisions total operating expenses grew by 16% (Y/Y) to Rs 2.9 billion; operating profit grew by 20% (Y/Y) to Rs 2.8 billion."

"Much higher NPA provisions of Rs 310 million (against Rs 113 mn) and general provisions of Rs160 mn (compared to Rs 75 mn) moderated the bank's bottomline growth to 6.8% (Y/Y) to Rs 1.6 billion. Improvement in CASA deposits share and decline in gross NPA were major positives of the result. We maintain our BUY rating on the stock with a target price of Rs 96 at 1.19x FY2010 adjusted BV," says Karvy Stock Broking's research report.

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Source: Moneycontrol

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