Andhra Bank - Dividend Play - Plutus Equity Research

Dividend Play:

Andhra bank is trading at 0.54x of its current book value with dividend yield at 5.92% which is one of the highest among PSU Banks. The stock has underperformed the benchmark indices like its peer group. Andhra Bank is paying 50% dividend i.e. Rs 5/share to its shareholder. For which, dividend date and record date are fixed at 11 July, 2013 and 15 July, 2013.

This dividend income will be tax free unlike fixed deposits.

Technical View:

Andhra bank started its price correction form 8th Jan 2013, has corrected from Rs. 129 to all the way to Rs. 78 (~40% correction), in line with most of the PSU bank. Stock has made a low Rs. 78 on 25th June 2013 and found support around these levels. Short term indicators are suggesting the bullish setup for this stock. On weekly chart, stock has good support around Rs. 75-77 levels and we expect decent bounce from these crucial levels. Hence, Buy Andhra bank at 82-84.5, Stop Loss 76.5, Target 93.

Source : Equity Bulls

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