Bank of India - March 2013 Results Preview - Motilal Oswal

- On a YoY basis, business growth is expected to be in line with industry average at 15%. However, this would be driven by strong growth in international business.

- Core NIMs are expected to improve by 10bp QoQ. However, reported NIMs are likely to remain flat as in 3QFY13 the bank had a one-off income of INR1.2b from interest on IT refund.

- Slippages are expected to be at a high level and upgradations and recoveries would be a key for asset quality performance.

- In 3QFY13, bank reported a tax rate of 14% which is expected to normalize to 27%. Hence, even as PBT is expected to grow 9% QoQ (decline 22% YoY), PAT is expected to decline 7% QoQ (decline 21% YoY).

- The stock trades at 0.7x FY14E and 0.6x FY15E BV, and 5.5x FY14E and 5x FY15E EPS. Maintain Neutral.

Source : Equity Bulls

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