Andhra Bank - Q3FY12 Result Update - Emkay

Reco: BUY
CMP: Rs 109
Target Price: Rs 140

Strong numbers; but not yet out of woods

- Andhra Bank Q3FY12 NII at Rs9.8bn / non-int inc at Rs2.4bn -ahead of estimates. Hence, despite higher std asset provisioning, PAT at Rs3bn was in line

- Slippages tap out at Rs3.8bn, more towards normalized levels. Surprised +vely by large upswing in recoveries. But LLPs remain low at 0.5% vs net slippages of 1.8%

- Loan portfolio grew 21% yoy (7% qoq). Reported NIM at 3.8% was flat qoq and was aided by 50bps qoq rise in CASA ratio (27%) and + 200bps qoq rise in LDR to 80%

- NPL ratios improve with PCR up by 370bps and NNPL/net worth at 12%. The stock trades at 0.8x/0.7x FY12 / FY13ABV. Upgrade to BUY with target price of Rs140.

Source : Equity Bulls

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