Buy Union Bank of India

Target Price 265
CMP 247.60

INVESTMENT RATIONALE
Union bank of India reported net profit of Rs.442.2 Crore during Q1FY10 far ahead of expectations. During Q1FY10 bank reported a net profit of Rs.442.2 Crore as compared to Rs.228.3 Crore in Q1FY09 a increase of 93.7% (y-o-y). Key triggers for banks out performance were decline of cost of funds, and higher other income. Net Interest Margin had significantly decline from 2.90% in Q1FY09 to 2.29% in Q1FY10.

Key Developments

• Both deposit and credit growth have been running ahead of the system

Buy YES Bank Ltd.

Target Price:Rs244.00
CM Price:Rs186.00

Recommendation
The bank has registered a compounded growth rate of around 60 per
cent since it interception. We expect the bank to continue to grow at a high rate.

We are very positive on the long term business prospects of the company and financial performance. At Current Market Price of INR 165.05 the stock is trading at a PE of 16.15x. With expected EPS for FY10 and FY11 of INR 17.73 and INR 19.32 respectively, the stock is trading at a PE of 9.7x and 8.9x respectively.