Monday, 24 November 2008

Buy City Union Bank, target of Rs 31: Karvy

Karvy Stock Broking has maintained its buy rating on City Union Bank with a target of Rs 31 in its November 24, 2008 research report. "Going forward, we believe that lending and deposits rates would further moderate and incidence of slippages due to higher interest rates would decline but due to lesser growth prospects across industries slippages would increase eventually increasing gross NPA."

"We estimate the bank's NIM for FY09 to drift down by 21 bps to 3.1%. We estimate that the bank's total business and bottomline would grow at 23% and 11% CAGR (during 2008-10) and the bank's book value and adjusted book value would be Rs 24 and Rs 22 respectively; we value the bank at 1.42x adjusted book value FY2010 at Rs 31. We re-iterate our BUY rating with a target price of Rs 31," says Karvy Stock Broking's research report.

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Source: Moneycontrol

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