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Suresh Krishnamurthy

THE stock of UTI Bank can be considered for accumulation at the prevailing price of Rs 54. The stock trades at a price to book value ratio of 1.35 times. With a dividend yield of 4 per cent and return on shareholder funds of net worth of about 27 per cent, the stock appears attractively valued. The stock's valuation is also more attractive compared with that of its peers such as ICICI Bank and HDFC Bank. The financial performance of the bank in the past couple of years has also been impressive with net interest margins rising and the proportion of non-performing assets declining. Factors such as pressure on spreads and deterioration in quality of assets do not appear a cause for major concern as of nowThe disinvestment of UTI's stake might hasten the process of the stock's re-rating in the markets.

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