Bank of India - Yet another disappointing quarter - Emkay

Reco: REDUCE
CMP: Rs 279
Target Price: Rs 240

- BOI Q2FY13 PAT at Rs3bn way below estimates despite zero tax, driven by sharp rise in NPAs/provisions even as NII at Rs22bn inline. NPA provisions rise 1.5-times over Q1FY13

- 15% NII growth largely driven by 15bps qoq expansion in Global NIM's to 2.4% helped by 28bps expansion in domestic NIM's, even as overseas NIM's contracted by 23bps qoq

- Asset quality deteriorated further with Rs27.3bn of slippages and Rs8bn of restructuring. With higher provisioning on incremental slippages, PCR improved to 41.2% from 34.6%

- Cut our earnings by 7/10% and ABV by 10% each for FY13/14E. Pressure on tier I rises with NNPA/Net worth ratio up further to 24%. Maintain REDUCE with TP of Rs240

Source : Equity Bulls

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