Bank of Maharashtra – Initiating Coverage – Nirmal Bang Institution Desk

Bank of Maharashtra (BoM), a small western India-based state-owned bank, has made use of its strong growth in pre-provision profits in the past two years to create a significant cushion, which would enable it to report significant net earnings growth for the next two years. With limited institutional interest, we believe BoM's current valuation does not reflect the improvement in its fundamentals.

We have assigned a Buy rating to the stock with a target price of Rs76, valuing it at 1.7x FY14E ABV and 0.9x FY14E BV, up 40% from the current market price.

Source : Equity Bulls

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