Outlook & Valuation: At the current market price, the bank’s core banking
business (after adjusting the value of subsidiaries) is trading at 1.7x FY2021E
ABV. We believe strength of liability franchise (CASA – 45%), shift in loan mix
towards retail assets & better rated companies, strong capitalization (tier I of
14.6%), steady improvement in stressed loan and going forward quick resolution
under IBC would be the key triggers for expansion. We recommend a Buy on the
stock with a Target Price of `490.

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