At the current market price, the bank’s core banking
business (after adjusting value of subsidiaries) is trading at 1.1x FY20E ABV. We
believe strength of liability franchise (CASA-50%), shift in loan mix towards retail
assets and better rated companies, Strong capitalization (tier I of 14.6%), and
steady improvement in stress loan and going forward quick resolution under IBC
would be the key trigger for multiple expansion. We recommend a Buy rating on
the stock, with a target price of `416.
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