Saturday, December 25, 2010

PUBLIC SECTOR BANKs = STAR PERFORMERS = ANDHRA BANK = DENA BANK = INDIAN BANK = CANARA BANK = BANK OF BARODA = 2011 LIKELY TO BE MUCH BETTER


PSU BANKS
HOW THEY STAND
BEFORE Q3 RESULTS

One of the Sectors which is grossly underpriced in Indian stock markets despite consistently improving performances is the  sector of PUBLIC SECTOR BANKS.

There are many stars and budding stars in this sector. Their main attraction is their consistency and dependability in all seasons, which is very uncommon in most other sectors.

At the rate at which the Indian economy is growing, the PSB sector is one SURE-SHOT SECTOR, which is bound to outgrow most other sectors consistently by a comfortable margin.

Now, the 4th quarter of FY 10-11 is due to start in January,2011. The results of the 3rd qtr also are due in January,2011. Some CRYSTAL GAZING before the new year into the stars of this sector is therefore useful for Investors.

Readers can watch out for some star performances from this sector. Based on past consistency and progress, the following PSBs need special attention. Some of the key performance indicators are presented for each Bank, for readers to judge their favourite candidates.



ANDHRA BANK

Total Income (Crs) : 2132; 2073; 1977; 1827; 1791;
Provisions (Crs):    120; 52: 223; 96; 58;
Basic EPS (In Rs. On Face Value of Rs.10) : 6.25; 6.61; 4.95; 5.68; 5.65;
% of Gross/Net NPA :  .49; .30; .17; .17; .16;
52 WEEK High/Low /CMP: 190; 94; 151;

Comments :

Andhra Bank has been scaling new heights every quarter. Its total income has increased by 341 cr or 19.03% in last 5 qtrs from 1791 cr to 2132 cr. Provisions are well under control and % of Gross/Net NPA is quite low compared to other Banks at 0.49.This consistently LOW Ratio, coupled with around 20% Income growth is a good indication for its excellent profitability in future.

As we can see, from its 52 week low of 98, it had scaled up by more than 100% to 190, but is now available at 151 – based on its current performance. In the next 4 quarters it is bound to more than improve on its last 4 Qtrs performance. It has set  a huge business target for 2011 and will achieve the same easily.

Its web site shows that Andhra Bank has been winning Best bank awards in many categories from prestigious Journals / Institutions consistently. One can expect it to scale up its performance much further in coming quarters.

Current PE Ratio is hardly 6, which leaves huge scope for price appreciation even in next 3 months.

One can expect Handsome gains from Andhra Bank in 2011.


DENA BANK

Total Income (In Crs) : 1340;1222; 1238; 1149;1088;
Provisions (In Crs):  73;  43;  82; 29; 1.5;
Basic EPS :  5.60;   4.84;   4.78;  4.69;  4.35;
% of Gross/Net NPA  : 1.49;  1.49;  1.21;  1.19;  1.24;
52 W H/L/CMP  : 151;  71;  115;

Comments :

Like Andhra Bank, Dena Bank has also been scaling new heights every quarter. Its total income has increased by 252 cr or 18.8% in last 5 qtrs from 1088 cr to 1340 cr. The rate of Growth of its Income at 18.8% is a sure indication of its increasing profitability in future. Provisions are well under control. But, % of Gross/Net NPA is around 1.5 compared to just 0.5 for Andhra Bank.

As we can see, from its 52 week low of 71, it had scaled up by more than 100% to 151, but is now available at 115 – based on its current performance. In the next 4 quarters Dena Bank is also bound to more than improve on its last 4 Qtrs performance. It is expected to get huge funds infusion from Government, which will enable it to have more loanable funds directly and also enable it to raise further funds from the market based on the same.Its business growth in next 4 qtrs is therefore bound to be impressive.

Dena Bank has been consistently improving its performance in last 5 qtrs. Current PE Ratio is hardly 5.13, which leaves huge scope for price appreciation even in next 3 months.

One can expect Handsome gains from Dena Bank in 2011.


INDIAN BANK



Total Income (In Crs) : 2559;  2477;  2318;  2308;  2174;
Provisions : 133; 344;  214; 32; 29;
Basic EPS : 9.40;    8.29        9.27        10.00      8.38
% of Gross/Net NPA : .73; .76; .23; .16; .18;
52 W H/L/CMP : 316;  155; 259

Comments :

INDIAN Bank is another Bank scaling new heights every quarter. Its total income has increased by 385 cr or 17.73% in last 5 qtrs from 2174 cr to 2559 cr. Provisions are well under control and % of Gross/Net NPA is quite low compared to other Banks at 0.73.

As we can see, from its 52 week low of 155, it had scaled up by more than 100% to 316, but is now available at 259 – based on its current performance. In the next 4 quarters it is bound to more than improve on its last 4 Qtrs performance. It has set  a huge business target for 2011 and will achieve the same easily.

Current PE Ratio is hardly 6.89, which leaves huge scope for price appreciation even in next 3 months.

One can expect Handsome gains from Indian Bank in 2011.

CANARA BANK

Total Income (In Crs) :  6077; 5895; 5507; 5469; 5602;
Provisions (In Crs) :   158;  220;  727;  167;      309;
Basic EPS : 24.58;  24.72; 12.27; 25.67; 22.21;
% of Gross/Net NPA :  1.06: 1.00; 1.06; 1.34; 1.16;
52 W H/L/CMP : 844;  360;  654;

Comments :

Canara Bank is one of the larger Banks in size and increasing in size further very fast. In performance also, it has been scaling new heights every quarter. Its total income has increased by 475 cr or 8.48% in last 5 qtrs from 5602 cr to 6077 cr. Provisions are well under control and have drastically come down from previous qtrs. The % of Gross/Net NPA is 1.06 which is moderate.

As we can see, from its 52 week low of 360, it had scaled up by more than 100% to 844, but is now available at 654 – based on its current performance. In the next 4 quarters it is bound to more than improve on its last 4 Qtrs performance.

One can expect it to scale up its performance much further in coming quarters. It has set its targets for FY11 quite impressively, based on its achievements in H1.
*       The Bank aims to reach an aggregate business figure of `5 lakh crore, ( From Rs.425258 crore  at Sep 2010) comprising total deposits of `285000 crore and advances of `215000 crore. 
*       The Bank has plans to open over 200 new branches during H2.

So, Growth in last 2Qtrs can be expected to be much higher. Current PE Ratio is hardly 6.65, which leaves huge scope for price appreciation even in next 3 months.

One can expect Handsome gains from Canara Bank in 2011

BANK OF BARODA :

Total Income (In Crs) : 5840;  5344;   5121; 4837;  4731;
Provisions (Crs) : 185;  251; 377; 242; 116;
Basic EPS: 27.98; 23.59; 24.88; 22.85; 17.41;
% of Gross/Net NPA : .38;  .39; .34;    .31; .27;
52 W H/L/CMP : 1052; 495; 895;

Comments :

Bank Of Baroda is another Bank scaling new heights every quarter. Its total income has increased by Rs.1109 cr or 23.44% in last 5 Qtrs from 4731 cr to 5840 cr. The rate of Income Growth has been the highest among the Banks covered here.

Provisions are well under control and % of Gross/Net NPA is one of the lowest compared to other Banks at 0.38.

As we can see, from its 52 week low of 495, it had scaled up by more than 100% to 1052, but is now available at 895 – based on its current performance. In the next 4 quarters it is bound to more than improve on its last 4 Qtrs performance. It has set  a huge business target for 2011 and will achieve the same easily.

Current PE Ratio is hardly 7.996, which leaves huge scope for price appreciation even in next 3 months – considering the huge progress, BOB is recording QOQ.

One can expect Handsome gains from BOB in 2011.

SUMMARY

All the above Stars are growing at impressive Rates – which is much higher than many other sectors / companies. Some well known stars like PNB and State Bank are omitted here.

There are also other good performers like Vijaya Bank, which are likely to improve their performance in coming qtrs, as can be seen from their targets.

One can expect a 100% improvement in their Market Prices  easily - even if only the 2010 maximum prices are reached. But, the investors can hope for much better too – based on the improved performances in 2011.

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1 comment:

  1. realy useful information/research

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