Buy Sydicate Bank for Rs 144: ICICI Direct

In a chat with ET Now, Pankaj Pandey, Head Of Research, ICICI Direct, shares his views on the outlook of Syndicate Bank.

Why do you like Syndicate Bank?

For Syndicate Bank we have a target price of Rs 144. The reason why we like this stock is that concerns over asset quality deterioration have done recede for after the next quarter and we would expect the bank to deliver ROEs of about 20% and it will be able to sustain about 3% mainly because of the fact that the bank has been actively shedding high cost bulk deposit. So, that is going to help the bank. It is among PSU universe this bank is available at 1.2 times forward book value whereas your other banks are in the range of 1.5 to 1.9 even SBI is at about 2.1. Since valuation wise it is quite attractive compared to the other banks and we would expect things to improve for the bank going forward, that is why we have a buy.