Scripscan:Andhra Bank
cmp:110
Code:532418
Story:Andhra Bank was set up in 1923. It is in retail and corporate sector serving them since long time. The bank has done pretty well from 2008-2011 periods when the market was under recession. However,Andhra Bank has always been little cheaper in the market compared to other banks. It is a medium size, nationalized bank with 1550+ branches. The bank mainly operates in southern part of India. The bank is also focusing in insurance business in collaboration with bank of Baroda and L&G group of UK offering insurance under IndiafIrst.Andhra bank has been able to maintain the operating expenses at the same level. This is a good sign as banks faced heavy expenses on operations in recession time. Andhra bank has always been relatively underpriced compared to SBI, BoB, or PNB.The reason is that Andhra bank’s fundamentals show high variation. The bank is inherently sound but the lack of consistency in performance is taking its toll on the stock price. The future is bright and I do not see any sign of worry. The bank is attractively valued at Rs 110.EPS at 21.7 with a price of Rs 110 a share is a good bet. The PE ratio is about 5.EPS is expected to show a steady rise of 20%+ over the next few years.The stock looks attractive at this price. There is upside of 20% – 30% in a year’s time. Business today and KPMG study have adjudged Andhra Bank number One in the asset quality front.
Source:Indus
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