Personally i think its a no-brainer ! Amit, awaiting your views on the same.
Its NPA% almost DOUBLED from last year. An innocent figure of 1.32 became 2.26 this year. If this is the trend then its dangerous. And Gov Banks have the tendency to do this. They are less competent lenders than their private counterparts.
Its RoA is around 1%, so a 2.26% of NPA means around 2.5 years of income is about to vanish...
Moreover, its EPS fell from 40.00 to 36.45, that is around 10% fall. Will this trend continue too!
Both these things have rightly spooked the investors and hence the stock is cheap. And cheap is not always good. Cheap can also get cheaper. (See Opto Circuits).
Regarding Financial Services companies, I would want solid numbers all around. Hence, I am very aggressive in buying Union Bank, whereas I would buy Axis more easily. HDFC too, but it seems super expensive right now.
But, its a good start. After you study 10 stocks, you may like 1
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