Brics PCG: 'Buy' Bank of India

BRICs PCG recommends to 'Buy' on Bank of India (BOI) at Rs 111 with a target price of Rs 170.

The bank has posted one of the best Q1FY07 results among PSU banks with net interest income (NII) growing robustly at 36.8% led by a 75-bps improvement in yield on advances to 8.15% and relatively lower cost of funds. Net profit also grew at over 20%.

Based on the guidance given by the management of BOI, it is expected to report robust performance in the subsequent quarters with deposits and advances growing in the range of 20-25%.