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SHARETIPSINFO >>Research Reports >> BANK OF MAHARASHTRA (05-05-2009)
LISTING |
|
|
Rs23 |
|
Rs57/Rs19 |
|
Rs10 |
PE RATIO |
2.9 |
VOLUME |
1243190 |
MARKETCAP |
Rs1005 crore |
P/BV |
0.57 |
DIV |
Rs 2 per share |
DIV YIELD |
8.7% |
COMPANY OVERVIEW:
The Bank was registered on 16th September 1935 with the authorized capital of Rs10 lakh. It commenced its business on 8th February 1936.
The Bank was later nationalized in 1969 thereby becoming Govt of India undertaking. At present it is having 1421 branches all over India. The bank is mostly concentrated in western India.
Bank of Maharashtra attained the autonomy status in 1998.
The bank wishes to cater to all types of needs of the entire family, in the whole country. Its dream is “One Family, One Bank, Bank of Maharashtra”.
Vision:
To be vibrant, forward looking, techno-savvy, customer centric bank serving diverse section of the society, enhancing shareholder’s and employee’s value while moving towards global presence.
Attributes:
Bank is the convener of State level Banker Committee.
Bank offer Depository services and Demat facilities in 131 branches.
Bank has tie up with LIC of India and United India Insurance Company for the sales of Insurance Policies.
All branches of the bank are fully computerized.
PRODUCT MIX:
PRODUCT NAME |
SALES VALUE(in crore) |
% OF TOTAL SALES |
Interest &Discount on Advances &Bill |
Rs2561.12 |
66.86% |
Income from Investment |
Rs945.96 |
24.69% |
Commission Exchange & Brokerage |
Rs208.39 |
5.44% |
Income from Sale of Shares and Securities |
Rs78.38 |
2.04% |
Interest from Balances with RBI and other Inter Bank Funds |
Rs22.13 |
0.57% |
Interest |
Rs11.37 |
0.29% |
Income from Dividend |
Rs2.75 |
0.07% |
INVESTMENT RATIONAL:
Bank has controlled its NPA very nicely. It is now at 0.82%.
It is very prominent candidate for Merger and Acquisition in PSU Bank.
At cmp of Rs23 the dividend yield stands at 8.7%. The bank gives dividend of Rs2 per share.
PSU Banks have huge exposure in G-sec .The prices of these Govt securities have sharply risen in past few months because of falling interest rate.
It has Book Value of Rs41 per share. The stock is trading at 57% of the Book Value per Share.
SHAREHOLDING PATTERN:
|
|
NO. OF SHARES |
% OF TOTAL |
PROMOTER |
330520000 |
|
76.77% |
|
INSTITUTION |
38427006 |
|
8.93% |
|
GENERAL PUBLIC |
61572994 |
|
14.30% |
|
GRAND TOTAL |
430520000 |
|
100.00% |
|
FINANCIAL :
|
|
31/03/05 |
31/03/06 |
31/03/07 |
31/03/08 |
TOTAL INCOME |
2752.93 |
2526.69 |
2987.08 |
3820.76 |
EXPENDITURE |
-2206.47 |
-2161.62 |
-2373.88 |
-3148.13 |
PBDIT |
|
546.46 |
365.07 |
613.2 |
672.63 |
DEPRECIATION |
0 |
0 |
0 |
0 |
PROVISION MADE |
-304.63 |
-299.38 |
-277.36 |
-152.47 |
PBT |
|
241.83 |
65.69 |
335.84 |
520.16 |
TAX |
|
-64.71 |
-14.9 |
-64 |
-191.77 |
PAT |
|
177.12 |
50.79 |
271.84 |
328.39 |
CHANGE IN TOTAL INCOME: CAGR IN TOTAL INCOME IS 11.55%.
CHANGE IN PBDIT: CAGR IN PBDIT IS 7.16%.
CHANGE IN NET PROFIT: CAGR IN NET PROFIT IS 22.85%.
RATIOS:
|
|
31/03/05 |
31/03/06 |
31/03/07 |
31/03/08 |
EPS |
|
4.113999 |
1.179709 |
6.314078 |
7.627575 |
PBDIT MARGIN |
19.85012 |
14.44855 |
20.52841 |
17.60461 |
NPM |
|
6.433872 |
2.01014 |
9.100526 |
8.594887 |
Key Highlights:
EPS has improved from Rs4.1 in FY2005 to Rs 7.6 FY2008. Though it showed a dip in FY2006 to 1.17.
PBDIT margin dipped marginally over the year from 19.5% in FY2005 to 17.6% in FY2008.
NPM has surged over the period by 210 basis points from 6.4% in FY2005 to 8.5% in FY2008.
COMPARISION OF Q3FY2009 WITH Q3FY2008:
|
|
31/12/07 |
%CHANGE |
31/12/08 |
TOTAL INCOME |
985.97 |
31.10% |
|
1292.6 |
EXPENDITURE |
-813.46 |
|
|
-1063.26 |
PBDIT |
|
172.51 |
33% |
|
229.34 |
DEPRECIATION |
0 |
|
|
0 |
PROVISION MADE |
-20.35 |
|
|
-35.11 |
PBT |
|
152.16 |
|
|
194.23 |
TAX |
|
-51.78 |
|
|
-73.57 |
PAT |
|
100.38 |
20% |
|
120.66 |
Key Highlights:
Total Income rose by 31.1%.
PBDIT has shown an increase of 33%.
Net Profit has moved up by 20%.
VALUATION:
Bank of Maharashtra has EPS of Rs8 per share. If assume the bank to earn Rs 8 forever without any growth and discount it at required rate of return of 20%, the valuation we arrive is Rs40 per share.
On the other hand at cmp the stock is trading at 2.9 xs to trailing twelve month earning. We value the company at 5 xs the valuation we arrive at is Rs 40 per share.
The stock is dividend paying stock and the dividend yield at CMP is 8.7%. This limits its downside risk.
CONCLUSION:
At this price stock is value for money. The downside is very limited and the same time there huge potential return from the stock. The stock is for risk averse investor. The holding period is 6 to 8 months.
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