IDBI Ltd, BUY
CMP: Rs 117 Target Price: Rs 161
Valuation
IDBI is on course to register a strong operational performance led by geographic expansion and improving profitability. We expect a re-rating in the bank’s valuation, as it steps up its core business and also starts reaping benefits from its equity portfolio. At the CMP of Rs 117, the stock is attractively trading at 1.2x FY2009E Adj. Book Value of Rs 94.1 and 1.1x FY2010E Adj. Book Value of Rs 107.5. We initiate coverage on the stock with a BUY rating and a 12-month target price of Rs 161.
FINQST,February 27, 2008
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