-------- Forwarded Message --------
Subject: Bank Of Baroda: Though There Is Hope---The Worst May Not Be
Over Yet
Date: Tue, 17 Nov 2015 09:35:21 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*For BOB, 180-195 zone might be proved as very strong supply zone for
the time being*
Expect Q3/Q4FY16 to be very tough for stressed assets management
*CMP: 176*
*
*
*Sell on rise: 180-195*
*
*
*TGT: 155-136 (1-3M)*
*
*
*TSL>201*
Note: Consecutive closing above 201 for any reason, BOB may scale up to
220-250 and in that scenario, sell position should be reversed.
Although, the stock reacted positively on new management's assurances
about ROE and future stressed asset managements, considering the heavy
exposoure to some of the debt laden corporate groups (for example Essar
steel) and continuing woes of metal (iron & steel) sector, in reality,
the overall stressed situation might improve only after Q4FY16 as its
top 20 accounts contribute nearly 75% of overall slippages.
Some analysts also cut the FY16-17 earnings by around 15% on account of
higher estimates of bad loans and slower credit growth.
Although, the stock rallied over 25% from the recent Q2FY16 result day
low assuming worst may be over for BOB as far its NPA is concerned, but
as par management's own statement, next two quarters may be quite tough
for it.
Technically, for BOB, 180-195 zone is a very strong resistance and only
sustaining above that, it may scale further up to 220-250 zone.
For an investment perspective, 155-136 zone may be a safe area to
accumulate it in the present market conditions, considering the low risk
reward ratio as NPA may be peaking in the next two quarters for BOB/PSBS
and Govt may unleash a slew of measures to improve capital structure &
functioning of PSBS (by way of FDI, M&A & incorporating professional
management).
*As par BG metrics & current market parameters:*
(Based on TTM & FWD EPS)
Present median valuation of BOB may be around: 157 (FY:15/TTM)
Projected fair valuations might be around: 150-190-220 (FY:16-18/FWD)
SCRIP EPS(TTM) BV(Act) P/E(AVG) Low High Median
200-DEMA 10-DEMA
BANKBARODA 9.55 179.62 15 157.71 155.89 156.80 173.63 169.65
BANKBARODA 8.95 235.75 15 152.68 150.92 151.80 173.63 169.65
BANKBARODA 13.95 260.55 15 190.61 188.41 189.51 173.63 169.65
BANKBARODA 19.05 292.25 15 222.74 220.18 221.46 173.63 169.65
*Analytical Charts:*
<http://3.bp.blogspot.com/-a_K89UDad-A/VkqayEt8tsI/AAAAAAAAE6Q/PieRmDdpq3U/s1600/BOB-16-11-2015.png>
<http://3.bp.blogspot.com/-CHd8dmTFRdw/Vkqaz4S_m1I/AAAAAAAAE6Y/BmM3HQ1nJrI/s1600/BOB-FIBB-16-11-2015.png>
<http://4.bp.blogspot.com/-VUVVSmMYBq4/Vkqa2JOumzI/AAAAAAAAE6g/lm2A4odRYgo/s1600/BOB-WK-16-11-2015.png>
<http://2.bp.blogspot.com/-d0-yR93_PzE/Vkqa4Fr5nAI/AAAAAAAAE6o/vW_b3KsnI_4/s1600/BOB-TL-16-11-2015.png>
<http://2.bp.blogspot.com/-7Pjjje0ynxE/Vkqa6XQvelI/AAAAAAAAE6w/LKdCq7YX8qk/s1600/BOB-TL-MT-16-11-2015.png>
<http://3.bp.blogspot.com/-PfFCPfEyPqw/Vkqa8f8UtUI/AAAAAAAAE64/km_fy6EtXPM/s1600/BOB-PATTERN-16-11-2015.png>
--
Thanks & Regards,
Asis Ghosh
--
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