Lakshmi Vilas Bank (LVB) is a 83 year old karur based bank with 251 branches spread over 13 states. Investor can consider this bank with a Long & Short term point of view. Currently the bank has announced Right issue 1:1 at 54/- per share which is discount to current market price.
Investor can approach this stock with stable fair value of 90/- per share. This can also be considered target for Short to Medium term target and Long term 125/-. Currently the weakness in the price is due to rights issue.
The banks book value for FY 2008-09 was 91/- and post rights issue it will be in range of around 75-80/- per share with EPS of around 9/- values this share very cheaply in the market compare to other South Based Banks trading at price to book value of 1.25 – 1.50.
The financial performance for the first half is excellent and this bank has consistent track record of dividend and has always rewarded its shareholder with Bonus & Rights issue.
Friday, November 20, 2009
LAKSHMI VILAS BANK LTD
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Hello. I have gone thru ur blog.
ReplyDeleteI have a stock, Aftek Ltd.
Please comment.
Very good for the long term.
Mr. Nitesh
ReplyDeletei am not tracking aftek ltd but according to information available this stock is ok. but this stock has not paricipated in rally as it should have been. if your cost of acquisition is high then hold it otherwise switch to other stock.
Lakshmi Vilas Bank is sure a Good Stock but somehow I have more faith on Karnataka Bank.
ReplyDeleteKarnataka Bank has no particular promoter and the shareholding is widely scattered and is a ideal candidate for takeover.
Your comments, Mr.Dilip
Dear Srikanth
ReplyDeleteKarnataka Bank Ltd is also a good stock but the bank had disappointing Q2 results with profit down 78%. however Long term prospective is good for karnataka bank.
But when we consider LVB its worth noteing following points
*Profits for Q2 up 217%
* Profits FY 2008-09 is 50.64Cr. and H1 45 crores for CY
*Bookvalue pre issue is 94/- and post issue will be in range of 75-80/-
*Consistent track record of Bonus & Rights along with dividend
*aroung 12% stake with private banks
one may consider post issue return of 15-20%
BUT IF RBI BRINGS MORE STRINGENT PROVISION NORMS THEN PROFITABILITY OF BANKING SECTOR MAY HIT HARD
Hi Dilip
ReplyDeleteWhat are your views on Karur vysya bank? I have a huge position in this bank and to me it appears to be as good as City Union and Lakshmi Vilas bank? What are your views and advice please?
thanks
Venu
Mr. Venu
ReplyDeletehold KVB for long term point of view and i expect Bonus / Rights issue from bank. overall its fundamentally good stock.
Hi Dilip
ReplyDeleteThanks for your quick response and assurance regarding KVB. I am thankful for your help. I already have good position in City Union bank. I like your ideas on HimatSingka. Looking for the right price for entry.
What are your views on GAS especially Gujarat Gas, Indraprastha Gas and Petronet? Which would you recommend for long term?
thanks
Venu
lvb is the good stock but we have to book profit this leveal 93
ReplyDeletelvb re entry rate is @79 and 75 then it will move to 125
ReplyDeleteshort term target is acheived. however movement of stock from current levels will depend up on performance of bank (Financial Results)so it may be possible that we can see level of 115/- shortly. LONG term investor can stay invested based on their ability to take risk.
ReplyDelete