Accumulate Allahabad Bank - Emkay

Reco: ACCUMULATE
CMP: Rs 156
Target Price: Rs 200

Strong performance; aggressive provs add comfort

- ALBK results ahead of estimates with NII at Rs13.8bn (est Rs12.7bn). Net profit at Rs5.6bn (est Rs5.6bn) further aided by higher trading gains and lower tax rate of 8%.

- Strong NII growth (31.3%yoy) driven by stable NIMs vs our exp of 20bps dip. Advances grew 5% qoq in line with expectations.

- Slippages at Rs5.9bn vs our est of Rs5.5bn. However, fresh restructuring of Rs10.5bn was a –ve surprise. Net stressed asset stand at 4.8% of advances vs 3.8% in Q2FY12.

- Upgraded FY12E/FY13E numbers by 17.7%/12.2 for largely lower tax rate. Aggressive provisioning policy provides comfort. Remains our top pick amongst mid-size PSU banks.

Source : Equity Bulls

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