Oriental Bank of Commerce rose 4.13% to Rs 243.10 at 15:04 IST on BSE, extending Monday's 4.22% rise triggered by a foreign brokerage upgrading the stock to 'buy' from 'neutral', citing positive risk reward.
Meanwhile, the BSE Sensex was up 26.64 points, or 0.10%, to 26,410.71.
On BSE, so far 2.58 lakh shares were traded in the counter, compared with an average volume of 1.90 lakh shares in the past one quarter.
The stock hit a high of Rs 244.50 and a low of Rs 233.35 so far during the day. The stock hit a 52-week high of Rs 377.30 on 29 May 2014. The stock hit a 52-week low of Rs 146.20 on 17 October 2013.
The stock had underperformed the market over the past one month till 13 October 2014, falling 18.45% compared with 2.50% fall in the Sensex. The scrip had also underperformed the market in past one quarter, sliding 13.17% as against Sensex's 5.43% rise.
The mid-cap company has an equity capital of Rs 299.85 crore. Face value per share is Rs 10.
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According to reports, the brokerage said that over the last 3 months, Oriental Bank of Commerce (OBC) has underperformed the Sensex and Bank Nifty. However, the return on assets (ROA) differential between OBC and other banks has narrowed over financial year ended March 2012 (FY 2012) to financial year ended March 2014 (FY 2014) from 30 basis points (bps) to 11 bps. The brokerage expects it to narrow further to 4 bps. Over FY 2014 to financial year ending March 2018 (FY 2018) estimates, it expects OBC's ROA to rise 42 bps on the back of decline in credit costs from 1.33% in FY 2014 to 0.9% in FY 2018 estimate; fall in operating ratio from 1.67% in FY 2014 to 1.45% in FY 2018 estimates; and better net interest margins (partly on better asset quality as impaired loans likely to decline from financial year ending March 2016 onwards).
The brokerage sees early signs of macro improvement. As this gathers steam, it will lead to better asset quality and hence better ROA, it said.
Shares of OBC rose 4.22% to Rs 233.45 on Monday, 13 October 2014. The stock has risen 8.53% in two preceding sessions from Rs 224 on 10 October 2014.
OBC announced at the fag end of trading session on Monday, 13 October 2014, that the issue of Tier II bonds of Rs 10 lakh each for cash at par aggregating Rs 750 crore with an option to retain over-subscription of upto Rs 250 crore opens Tuesday, 14 October 2014 and closes on 21 October 2014. Deemed date of allotment shall be 27 October 2014. The bonds have been rated "ICRA AA+ (Hyb)" & "CARE AA+" by ICRA & CARE respectively and bear coupon rate of 9.20% per annum with a tenor of 120 months, the company said.
OBC's net profit rose 3.2% to Rs 364.54 crore on 6.1% growth in total income to Rs 5576.02 crore in Q1 June 2014 over Q1 June 2013.
The Government of India holds 59.13% stake in OBC (as per the shareholding patterns as on 30 June 2014).
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