Sharekhan's research report on Bank of India
Bank of India (BoI) reported strong growth in operating profits up (74% y-o-y/ 8% q-o-q) led by robust growth in NII (64% y-o-y/ 10% q-o-q) driven by sharp improvement in NIMs (up 24 bps q-o-q/ 101 bps y-o-y) and strong loan growth (18.5% y-o-y/ 3.4% q-o-q). We believe NIMs are probably closer to its peak. Core credit cost (annualized) was reported at 0.93% versus 0.60% of average advances in the last quarter. The bank has guided that core credit cost is expected to undershoot from current levels and remain well below 1% going forward over the medium term. PAT reported at Rs. 1,151 crore grew by 12% y-o-y/ 20% q-o-q. Slippages were down by 6% q-o-q at 1.2% (annualised) versus 1.4% q-o-q, coupled with higher recoveries & upgrades and higher write offs, asset quality saw sharp improvement with GNPA and NNPA ratios falling by 85 bps/31 bps q-o-q to 7.66%/1.61%. PCR at 80% vs 79% q-o-q.
Outlook
At CMP, BoI trades at 0.8x/ 0.7x/ 0.6x its FY2023E/ 24E/ 25E ABV estimates. We maintain our hold rating on the stock with a revised PT of Rs. 102. Overall, the outlook remains strong going forward however we await better price entry point factoring in margin of safety.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.