Bank of India - Result Update - Nirmal Bang

- Bank of India posted net earnings of Rs8.0bn for 3QFY13 aided by NII growth of 11.6% YoY and stable asset quality.

- Asset quality concerns were capped amid higher recoveries and up gradation during the quarter.

- Gross NPAs and net NPAs stood at 3.08% and 1.97%, respectively.

- Factoring in adequate capital cushion of Rs8.1bn likely during 4QFY13E and looking at 9MFY13 operating performance, we have revised our NII/PAT estimates upwards for FY13E.

- Rolling forward our target multiple to FY14, we have revised upwards our rating on the stock to Buy from Sell with a target price of Rs420 from Rs230 earlier, based on 2.1x FY14E adjusted book value or ABV (from 2.2x on FY13E ABV earlier), implying an upside of 18% from the current market price.

Source : Equity Bulls

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