Tuesday 4 November 2008

Buy Corporation Bank, target of Rs 274: Indiabulls Sec

Indiabulls Securities Research has maintained its buy rating on Corporation Bank with a target price of Rs 274 in its November 3, 2008 research report. "The bank’s operating profit and net profit grew by 19.3% and 18.7% yoy respectively, driven chiefly by a modest 14.7% yoy growth in NII. We have valued the standalone Bank by using a three-Stage Discounted Equity Cash Flow model. Based on our assumption of a 14.6% cost of equity and a 11.1% terminal growth rate, we have arrived at a target price of Rs 274, which implies a potential upside of 30% over the current market price of Rs 210. The stock also quotes a forward P/B of 0.6x which makes it a compelling value play. Thus, we reiterate our Buy rating," says Indiabulls Securities' research report.

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Source: Moneycontrol

Posted by Harsh at 09:57

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