Hold Allahabad Bank

P Phani Sekhar of Angel Broking is of the view that one can hold Allahabad Bank. Sekhar told CNBCTV18, “The key to analysing second tier public sector banks is to look at the structure of the balance sheet, which will give you the capital adequacy ratio, the quality of the assets which will give you the net NPAs and most importantly the valuations that it trades on. If you look at the first two parameters for Allahabad Bank it looks rather average. The only factor going in Allahabad Bank’s favour is the kind of absurd valuations that it had fallen to in the previous correction and it is bouncing from an oversold ground.” He further added, “Going forward we will tend to believe that the net NPAs which are around 0.82 might go up to around 1 per cent. Hence the valuation that we are seeing may not exactly be as cheap as it appears today in which by the way is in the median range of the valuation of all second tier public sector banks. One should hold on Allahabad Bank and think of entering it only on 1015 pert cent kind of declines from the current levels.”