Technically, BOB (CMP:165) has immediate good support zone of around 160 & sustain below that 153 zone may offer positional support. Consecutive closing below 153, it may fall 147-142-139 zone in the near term and sustain below 139, BOB may further fall to 125-109 zone in the extreme bear case scenerio. (160-153-142 may be good demand zone).
On the up side, sustain above 160, its immediate to short term target may be around 170-173-178-182. Consecutive closing above 182, BOB may scale 188-196-200-210 zone in the mid term. In the long term, only sustain above 210, it may target 225-230-240 to 310-340 zone (FY:17-18) in the bullish market scenerio. (173-182-200 may be good supply zone).
Bottom Line: Technical Trading Levels (Positional)
| SL</>2 | FROM SLR | |||||||||
| BOB | CMP | 165 | ||||||||
| T1 | T2 | T3 | T4 | T5 | T6 | T7 | SLR | |||
| Strong > | 160 | 165-170 | 173-178 | 182* | 188 | 196 | 200 | 210-230 | <158 | |
| Weak < | 158 | 153* | 147 | 142* | 139 | 129 | 125 | 116-109 | >160 | |
BOB surprised the market by showing sequentially lower NPA in its Q4 result, although net profit declined by 48% amid sharp increase in provisions for restructured loan portfolios (CDR) possibly due to RBI March'15 deadline.
Going ahead market may observe another two/three quarters of results for a visible/definite trend of real NPA. Previous two years of weaker economic growth amid high cost of funds environment, stretched corporate balance sheet and stalled projects has led to Indian Bank's amazing accumulation of NPA(s), specially for PSB(s).
As with all the other Banks, BOB is also concentrating more on retail loan portfolios at this moment because of weak corporate/industry loan demand. Also its focusing more on overseas markets which contributes a significant portion of the bank's profit. With very robust loan monitoring system put in place, BOB management is confident of sequentially lower slippages in bad loans going forward, although it has warned the Q4 trend of significantly lower NPA as an exception.
For corporate India/MSME sector, high cost of funds (bank loans) is an issue, where globally it's just the opposite. To revive "Shinning India" theme and change the present sentiment "gloom & doom" for industrial and overall economic activity, RBI must act first.
Mere 0.25% repo rate cut by RBI may not be sufficient today, unless CRR is cut by at least 0.50%, which will theoretically release around Rs.45000 cr in the banking system to address the growing liquidity problem for banks (specially for PSBS) immediately----otherwise, who will fund the "India Growth" Story ?
As
par BG metrics, median TF valuations might be around 170 (current) & 200-225
(projected-FY:16-17) under the current market conditions :
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| BANKBARODA | 15.83 | 167.11 | 10.75 | 173.80 | 165.49 | 169.65 | 177.51 | 160.94 |
| BANKBARODA | 21.98 | 181.5 | 10.75 | 204.80 | 195.01 | 199.90 | 177.51 | 160.94 |
| BANKBARODA | 27.64 | 196.95 | 10.75 | 229.66 | 218.68 | 224.17 | 177.51 | 160.94 |
| 177.51 | 160.94 |
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