Worth a punt

PUBLIC ISSUE

Dec, 04Dec, 03 Net interest income1029.25791.4730.04 Net profit462.47242.2490.91 Advances20786.3014674.9341.64 Deposits38141.8228107.4035.70 Yield on advances(%)9.099.59-0.50 Cost of deposits (%)4.975.80-0.83 Net interest margin (%)3.443.390.05 Capital adequacy (%)12.1111.760.35 Net NPAs (%)1.484.17-2.69  The earnings estimate for FY05 is Rs 17 and the bank should be able post a similar number in FY06 as well. Based on FY05/FY06 earnings per share, the stock is valued at 4-4.3 times, lower than its peers, based on the higher end of the expected issue price.  Given the current market price of Rs 95, the bank trades at a multiple of 6 times 12-month trailing earnings and 5.5 times  FY05 earnings. The stock looks attractively valued at the issue price. Moreover, banks - especially the public sector ones - are undervalued compared to other sectors. Marketmen point to a further upside for the banking sector.