Such a healthy performance, analysts say, should help the bank reach 10 per cent return in equity (RoEs) over the next 2 years.
“Given the stable asset quality and the additional buffers created, we lower credit costs by 20bps for FY22/23e to 1.6 per cent and 1.4 per cent, respectively. The core operating profit in our view will remain in the 1.5-1.7 per cent range and higher capital gains from stake sales in subsidiaries should protect overall profitability,” said analyst at Investec in a post-result report.
On the back of a nearly 22 per cent upgrade to FY22e PAT and a 7 per cent upgrade to book value of equity per share (BVPS) post the results, the brokerage has increased its valuations multiple to 1.0x (from 0.7x) and value of subsidiaries in SOTP to Rs 115 (from Rs 90) leading to revised target price of Rs 430 (from Rs270).
At the bourses, the stock is around 4 per cent off its record high of Rs 408, touched on February 5, 2021. So far in the calendar year 2021, the stock has soared 42.6 per cent on the BSE, as against a 10 per cent in the benchmark S&P BSE Sensex.
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