Syndicate Bank - Tax write-back boosts profitability... - ICICIdirect

Profits were higher than our and Street estimate but were mainly driven by tax write-back of Rs.174.3 crore (of which MAT credit is Rs.140.8 crore), which may continue in Q4FY13. Tax rate for FY14E is expected to remain low as MAT benefit created in FY13E may be used. At PBT level, results were dismal with 11.8% YoY de-growth to Rs.334.2 crore (I-direct estimate: Rs.488.3 crore) mainly on account of subdued NII growth.

Yield on advances dipped 16 bps QoQ to 10.7%. Even other income growth was modest, which included trading income of Rs.90 crore. We have lowered our NII estimate from Rs.6038 crore to Rs.5542 crore in FY13E and have accounted for tax write-back that the bank has been taking.

Syndicate is one of the few PSU banks delivering stable asset quality. Hence, investors can accumulate the stock on correction. At CMP, we recommend HOLD.

Source : Equity Bulls

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