Buy Bank of India with target of Rs 491

Bank-of-IndiaTechnical analyst K R Choksey has recommended that the stock of banking major Bank of India can test Rs 491.

Today, the stock of the bank opened at Rs 456.00 on the Bombay Stock Exchange (BSE). The share price has seen a 52-week high of Rs 588.00 and a low of Rs 310.05 on BSE.

Current EPS & P/E ratio for the stock stands at Rs 46.14 and 9.68 respectively.

However, the Bank of India is the 3rd PSU bank by branch network as well as has great presence abroad, with around 29 branches at major banking regions.

The bank's international business includes 17.3 percent of the total business. At present, it has around 3,200 offices and almost 39,000 workers. The public sector bank aims to have a branch network of around 3,500 branches and 1500 ATMs by the end of this financial year.

Mr. Choksey further said, "Net interest income grew by 33% y-o-y and 12% q-o-q to Rs 1,987 crore as loan book expanded by 23% driven by large ticket corporate loans and auto loans coupled with 28bps q-o-q improvement in margin. Both domestic and overseas margins continued to show sustainable improvement on q-o-q basis."

His research report recommends that at Rs 461, stock is working at 6.5x FY12 earnings and 1.7x FY12ABV. According to him, the HOLD rating on the stock with the earlier target price of Rs 491.