ICICIdirect has maintained 'Sell' on Syndicate Bank with target price of Rs 82 as against current market price (CMP) of Rs 102 in its report.
Commenting on the investment rationale, the stock broker said, "Syndicate Bank's Q4 was marginally below estimate with PAT at Rs 4.09 billion (down 31% YoY) as expected. However, NPA slippages were higher than guided; hence, provisioning soared to Rs 6.31 billion. Slippages increased to Rs 11.97 billion in Q4 vs. Rs 6.91 billion in Q3 while fresh restructured assets (RA) added were Rs 10.94 billion.
Credit growth was higher than estimated at 18% YoY to Rs 1,739.12 billion vs. 13% expected while deposits grew 14.6% YoY to Rs 2,123.43 billion lower than the estimated 16.4%. Reported NIMs stayed steady QoQ at 2.79%.
Driven by MAT credit, FY12 and FY13 return ratios seemed higher with average ROA and RoE at 0.8% and 17.5%, respectively. However, the same was unavailable in FY14 due to which RoE dropped to 15.2% apart from subdued operational performance (like lower margins & enhanced credit cost than FY13). Going ahead, we expect earnings CAGR of 13% over FY14-16E."
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