About the Company:
India’s largest PSU Bank and world’s fourth largest bank that has maximum internet banking transactions in Indian economy has reported just a day before the interim budget to be announced by FinMin Piyush Goyal.
QoQ & YoY Performance:
India’s largest PSU bank has declared the results for the second quarter of fiscal year ending March, 2020.
- Net Interest Income: NII (difference between interest earned and interest expendid) that serve as a major factor for future prospects have landed to 27,251.14 crores, are increased 2.69% QoQ while on YoY basis, there is an increase of 9.65%. QoQ growth in interest expended is grown more than interest earned.
- Net Profits: The bank has posted net profits of 3,645.83 lakhs this quarter. On QoQ basis, net profits have surged 14.80% while on a YoY basis, there is a increase of 385.09%.
- Provisions and Contingencies: Bank's provisions and contingencies have been surged sharply by 44.36% QoQ, however, a little surge of 11.17% has been witnessed in YoY.
- NPA (Gross): Gross NPA% has fallen this quarter by 9.33% QoQ and 27.74% YoY, which will act as a catalyst for the investors to form long positions in the stock.
- NPA (Net): Net NPA ratios are plunged by 9.12% QoQ and 42.36% YoY.
As per Lokesh Sethia, SEBI Registered Research Analyst, even after being the largest PSU Bank, it has managed to report a plunge in non-performing assets. Asset quality of the bank has been improved drastically. NII margins of the bank has been improved. Being a leader in the market, the bank is trading at a trailing (EPS) P/E ratio of 31.21 against the Industry P/E of 146.62. We recommed to 'BUY' at current market price for a target of Rs. 320 in one-year horizon.