Stock views on GRASIM, BANK OF INDIA

Enam Research on BANK OF INDIA

Bank of India reported a strong performance with 24 per cent increase in net profit y-o-y with an improvement in asset quality. Core income was up 34 per cent y-o-y led by 20 per cent loan growth and higher margins at 2.89 per cent.

Asset quality improved with absolute gross non performing asset (NPAs) declining 2 per cent sequentially led by lower slippages and strong recoveries/upgradations. Gross and net NPA ratio stood at 2.71 per cent and 1.18 per cent, respectively.

With the asset quality concerns of the bank receding, earnings estimates are revised upwards by 15 per cent and 4 per cent for FY11E and FY12E, respectively. The stock is trading at 1.4x FY12E ABV and 7.5x FY12E earnings with sector neutral rating.

Enam Research on GRASIM

Grasim's adjusted net profit dropped 22.5 per cent y-o-y during the quarter to Rs 575 crore.

The company's consolidated bottom-line fell on to poor performance by the cement division, which reported 27 per cent y-o-y decline in operating profit.

However, the VSF division continued its impressive show and registered 54 per cent y-o-y growth in operating profit. UltraTech will be the sole driver of its interests in the cement business post the UltraTech - Samruddhi merger, which comes into effect from August 1.

On a stand-alone basis, the company would primarily focus on its VSF business, which has recovered well over the past few quarters from the slump in FY09.