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The Allahabad Bank stock, which closed at Rs 92.40 on the NSE on Monday, is being tracked for what some sections believe are the bank's improving fundamentals. Its deposit mobilisation, for instance, is expected to grow by 20 per cent over fiscal 2007-08, complete with a CAGR of 21 per cent in low-cost deposits. This will help the bank maintain low cost of funds, releasing the pressure on net interest margin, brokers argue.

Fee income will grow, propelling profitability, they add. At current prices, the stock is quoting at approximately P/E of 5x fiscal 2008 estimated EPS of Rs 18.6 and 0.9x fiscal 2008 adjusted book value of Rs 102.6. Monday's closing price represented a 2.48 per cent drop from its previous close.

Nilanjan Dey

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