2QFY2012 Result Update | Banking

November 14, 2011

Andhra Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT

Source: Company, Angel Research

NEUTRAL
CMP Target Price
% chg (qoq) 4.5 (1.8) (18.0) 2QFY11 783 565 303 % chg (yoy) 21.4 21.7 4.3

`109 -

2QFY12 951 687 316

1QFY12 910 700 386

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 6,113 0.9 182/109 109,776 10 17,118 5,148 ADBK.BO ANDB@IN

For 2QFY2012, Andhra Bank registered 4.3% yoy growth in its PAT to `316cr, slightly above our estimate due to higher net interest income and lower tax expenses than factored in by us. We recommend a Neutral rating on the stock.
Asset quality deteriorates significantly: The banks loan book declined sequentially by 2.8% to `73,592cr (up 21.5% yoy); however, deposits grew by 3.9% qoq to `94,435cr (up 20.2% yoy). CASA deposits declined by 2.4% qoq (up by weak 3.4% yoy), leading to CASA ratio dropping sequentially by 169bp (substantial 435bp yoy decline) to 26.1%. The banks yield on advances rose by 22bp qoq to 12.5% in 2QFY2012, however further deposit re-pricing during 2QFY2012 led to cost of deposits increasing by relatively higher 43bp qoq to 7.5%. Consequently, reported NIM remained flat sequentially at 3.8%. The banks asset quality deteriorated substantially during 2QFY2012, with gross NPA rising by 68.9% qoq to `1,987cr and net NPA more than trebling to `1,087cr. The bank switched over accounts worth `25lakhs and above to system-based NPA recognition during the quarter. Gross NPA ratio as of 2QFY2012 stood at 2.7% (1.6% in 1QFY2012) and net NPA ratio stood at 1.5% (0.5% in 1QFY2012). Provision coverage ratio (including technical write-offs) declined sharply to 61.7% in 2QFY2012 from 82.0% in 1QFY2012. Outlook and valuation: At the CMP, the stock is trading at 0.7x FY2013E ABV compared to its five-year range of 0.8x1.4x one-year forward ABV with a median of 1.1x. Considering the banks hefty exposure to the power sector (more than 20% of the loan book) and sharp deterioration in asset quality during 2QFY2012, we recommend Neutral on the stock. Key financials
Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 58.0 15.8 13.2 12.9

Abs. (%) Sensex Andhra Bank

3m (1.7) (17.6)

1yr (15.7) (38.6)

3yr 82.4 112.1

FY2010 2,195 34.9 1,046 60.1 2.8 21.6 5.1 1.2 1.3 26.0

FY2011 3,221 46.8 1,267 21.2 3.3 22.6 4.8 0.9 1.3 23.2

FY2012E 3,800 18.0 1,341 5.8 3.3 24.0 4.6 0.8 1.1 19.2

FY2013E 4,115 8.3 1,242 -7.3 3.0 22.2 4.9 0.7 0.9 15.6

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

Andhra Bank | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance

Particulars (` cr) Interest earned Interest expenses NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT EPS (`) Cost-to-income ratio (%) Effective tax rate (%) Net NPA (%)
Source: Company, Angel Research

2QFY12
2,783 1,831 951 178 1,129 442 687 261 426 110 316 5.6 39.2 25.8 1.5

1QFY12 % chg (qoq)

2,634 1,724 910 217 1,127 428 700 177 523 137 386 6.9 37.9 26.2 0.5 5.6 6.2 4.5 (18.0) 0.2 3.4 (1.8) 47.3 (18.5) (19.7) (18.0) (18.0)

2QFY11 % chg (yoy)

1,941 1,158 783 191 974 410 565 120 445 142 303 6.2 42.1 31.9 0.5 43.3 58.2 21.4 (7.0) 15.9 7.9 21.7 118.0 (4.2) (22.5) 4.3 (9.6)

Exhibit 2: 2QFY2012 Actual vs. Angel estimates

Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 951 178 1,129 442 687 261 426 110 316

Estimates 886 201 1,087 457 630 211 419 126 293

Var. (%) 7.4 (11.7) 3.9 (3.3) 9.0 23.4 1.8 (12.4) 7.9

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Advances decline sequentially

The banks loan book declined sequentially by 2.8% to `73,592cr (up 21.5% yoy); however, deposits grew by 3.9% qoq to `94,435cr (up 20.2% yoy). Consequently, CD ratio decreased to 77.9% in 2QFY2012 from 83.3% in 1QFY2012. CASA deposits declined by 2.4% qoq (up by weak 3.4% yoy), leading to CASA ratio dropping sequentially by 169bp (substantial 435bp yoy decline) to 26.1%. We have factored in loan growth of 13% and 17% for FY2012 and FY2013, respectively. The banks yield on advances rose by 22bp qoq to 12.5% in 2QFY2012, however further deposit re-pricing during 2QFY2012 led to cost of deposits increasing by relatively higher 43bp qoq to 7.5%. Consequently, reported NIM remained flat sequentially to 3.8%.

Exhibit 3: Advances growth strong for 2QFY2012

Adv. qoq chg (%) 15.0 10.0 5.0 77.1 79.9 Dep. qoq chg (%) 83.3 77.5 CDR (%, RHS) 85.0 77.9 80.0 75.0

Exhibit 4: CASA deposit growth declines substantially

32.0 30.0 28.0 CASA ratio 18.6 17.0 CASA yoy growth (%, RHS) 17.1 14.5 20.0 15.0 10.0

8.9 12.3

6.0 5.2

8.3 4.5

6.0

3.9

70.0

30.4

28.5

29.1

27.8

(1.4)

(5.0)

(2.8)

65.0 60.0

24.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

26.2

26.0

3.4

5.0 -

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Exhibit 5: Cost of deposits rise by 43bp qoq...

8.00 7.50 7.00 6.50 6.00 5.50 5.00 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 5.67 5.84 6.48 7.45 7.02

Exhibit 6: ...leading to flat NIM at 3.8% in 2QFY2012

4.00 3.91 3.91 3.77 3.69

3.80

3.72

3.60

3.40 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

Source: Company, Angel Research

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Asset quality deteriorates substantially

The banks asset quality deteriorated substantially during 2QFY2012, with gross NPA rising by 68.9% qoq to `1,987cr and net NPA more than trebling to `1,087cr. The bank switched over accounts worth `25lakhs and above to system-based NPA recognition during the quarter. Gross NPA ratio as of 2QFY2012 stood at 2.7% (1.6% in 1QFY2012) and net NPA ratio stood at 1.5% (0.5% in 1QFY2012). Provision coverage ratio (including technical write-offs) declined sharply from 82.0% in 1QFY2012 to 61.7% in 2QFY2012. To factor in the deteriorating asset quality, we have revised our estimates for provisioning expenses upwards by 15.2% for FY2012.

Exhibit 7: NPA ratios deteriorate significantly qoq

Gross NPAs (%) 3.0 2.5 2.0 1.5 1.0 78.9 80.4 Net NPAs (%) 83.9 82.0 PCR (%, RHS) 90.0 61.7 75.0 60.0 45.0 30.0

Exhibit 8: Muted branch expansion in 1HFY2012

Branches 1,680 1,640 1,600 1,560 1,520 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12
Source: Company, Angel Research

ATMs (RHS) 1,025 1,012 981

1,040 1,000 960 920

954 926

1,564

1,587

1,632

1,640

1,652

1.3 0.5

1.3 0.5

1.4 0.4

1.6 0.5

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

2.7 1.5

0.5

15.0 -

880 840

Exhibit 9: Employee expenses flat for 2QFY2012

Staff expenses (`cr) QoQ growth (% , RHS)

Exhibit 10: Declining opex to avg. assets

Cost-to-income ratio (%) 60.0 50.0 40.0 30.0 20.0 1.6 1.6 1.8 1.7 1.7 Opex to average assets (%, RHS) 1.9 1.8 1.7 1.6

325 250 175 100 25 (50) (0.2)

14.7

20.0 10.0 0.2 -

260

260

298

273

274

42.1

39.7

38.7

37.9

(10.0) (20.0)

10.0 -

39.2

(9.4)

(8.3)

1.5 1.4

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Investment concerns
Continual weak performance in fee income and likely drop in margins to be a drag on profitability
During the last four years (FY200711), fee income (non-interest income excluding treasury) has risen at a CAGR of only 12.8% compared to advances growing at a CAGR of 26.5%. This resulted in fee income dropping to 0.8% of average assets (as of FY2011) from 1.1% in FY2007. We expect the weak performance with regards to fee income to continue and, hence, have estimated moderate growth of 3.3% and 15.3% in FY2012 and FY2013, respectively. The bank has one of the highest yields in the industry (12.5% as of 2QFY2012), also reflected in the relatively stronger calculated NIM of 3.3% (as of FY2011). Although reported NIM rose sequentially by 5bp during 2QFY2012, the cost of deposits increased substantially by 43bp qoq to 7.0%. The bank also has a relatively weaker liability profile with a calculated CASA base of sub-30% at 26.2%. Given the high yield on advances, we also expect asset quality pressures to be on the higher side for the bank.

Outlook and valuation

The banks asset quality which till 1QFY2012 was significantly better than its peers, deteriorated substantially during 2QFY2012, with gross NPA rising by 68.9% qoq to `1,987cr and net NPA more than trebling to `1,087cr. Provision coverage ratio (including technical write-offs) declined sharply from 82.0% in 1QFY2012 to 61.7% in 2QFY2012. To factor in the deteriorating asset quality, we have revised our estimates for provisioning expenses upwards by 15.2% for FY2012. At the CMP, the stock is trading at 0.7x FY2013E ABV compared to its five-year range of 0.8x1.4x one-year forward ABV with a median of 1.1x. Considering the banks hefty exposure to the power sector (more than 20% of the loan book) and sharp deterioration in asset quality during 2QFY2012, we recommend Neutral on the stock.

Exhibit 11: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage Ratio
Source: Angel Research

Earlier estimates FY2012 15.0 21.0 27.7 3.0 (0.2) 7.0 14.0 1.6 81.0 FY2013 17.0 17.0 27.4 2.7 14.1 13.0 15.0 1.8 74.0

Revised estimates FY2012 13.0 19.0 28.2 3.3 (6.4) 6.0 14.0 2.4 70.0 FY2013 17.0 17.0 27.8 3.0 13.9 13.0 15.0 2.4 70.0

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Exhibit 12: Change in estimates

FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2013 Earlier estimates 3,717 1,021 4,738 2,123 2,615 775 1,840 597 1,243 Revised Var. (%) estimates 4,115 956 5,072 2,110 2,962 1,123 1,839 597 1,242 10.7 (6.3) 7.0 (0.6) 13.2 44.9 (0.1) (0.1) (0.1)

Earlier estimates 3,522 895 4,417 1,866 2,551 754 1,797 539 1,258

Revised Var. (%) estimates 3,800 840 4,640 1,855 2,784 869 1,915 575 1,341 7.9 (6.2) 5.0 (0.6) 9.1 15.2 6.6 6.6 6.6

Exhibit 13: P/ABV band

Price (`) 200 180 160 140 120 100 80 60 40 20 0
Dec-06 Apr-02 Jul-07 Aug-04 Apr-09 Mar-05 Aug-11 Nov-02 May-06 Nov-09 Mar-12 Oct-05 Feb-08 Sep-08 Jun-03 Jan-04 Jun-10 Jan-11

0.6x

0.8x

1x

1.2x

1.4x

Source: Company, Angel Research

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Exhibit 14: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Accumulate Accumulate Buy Accumulate Buy Neutral Neutral Buy Neutral Accumulate Accumulate Neutral Buy Neutral Accumulate Accumulate Accumulate Neutral Neutral Buy Buy Buy Neutral Accumulate Buy Neutral CMP (`) 1,049 390 471 821 23 294 165 109 778 333 48 457 96 408 72 105 213 100 818 292 939 1,753 105 66 222 64 56 Tgt. price (`) 1,414 444 497 1,114 24 355 918 55 523 498 115 227 107 1,106 2,194 123 245 75 Upside (%) 34.8 13.8 5.5 35.6 6.5 21.0 18.0 15.0 14.4 21.9 10.3 6.4 7.7 17.8 25.2 17.5 10.3 16.9 FY2013E P/ABV (x) 1.7 1.1 3.2 1.5 1.1 1.9 0.8 0.7 1.1 1.0 0.6 0.9 0.7 0.7 0.5 0.7 0.8 0.6 0.9 0.7 1.1 1.4 0.7 0.8 0.8 0.5 0.7 FY2013E Tgt P/ABV (x) 2.3 1.2 3.4 2.0 1.2 2.3 1.3 0.7 1.0 0.8 0.8 0.9 0.7 1.3 1.7 0.8 0.9 0.6 FY2013E P/E (x) 9.2 8.0 16.4 12.1 6.6 9.7 4.4 4.9 5.5 5.7 4.1 5.3 4.9 4.2 3.4 4.9 4.8 4.0 5.1 5.1 5.6 7.5 4.6 3.9 5.1 3.8 6.0 FY11-12E EPS CAGR (%) 17.7 19.5 30.5 23.3 15.6 19.9 12.2 (1.0) 14.2 13.4 38.1 (3.0) (16.1) 1.5 7.5 12.3 7.4 20.0 12.0 5.1 9.9 33.9 11.8 15.9 5.2 12.5 3.6 FY2013E RoA (%) 1.5 1.2 1.7 1.4 1.0 1.3 1.0 0.9 1.2 0.7 0.6 0.9 0.5 0.8 0.8 0.7 1.3 0.6 1.3 0.8 1.1 0.9 0.7 0.7 0.8 0.6 0.4 FY2013E RoE (%) 20.0 14.0 20.9 15.4 18.2 20.8 18.4 15.6 20.7 16.9 16.5 17.2 13.9 16.6 16.4 14.0 19.4 15.9 17.8 14.1 20.6 20.0 16.3 16.7 17.0 13.9 11.7

Source: Company, Angel Research; Note: *Target multiples=SOTP Target Price/ABV (including subsidiaries); # without adjusting for SASF

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Income statement
Y/E March (` cr) NII - YoY growth (%) Other income - YoY growth (%) Operating income - YoY growth (%) Operating expenses - YoY growth (%) Pre-prov. profit - YoY growth (%) Prov. & cont. - YoY growth (%) PBT - YoY growth (%) Prov. for taxation - as a % of PBT PAT - YoY growth (%) FY07 1,418 21.3 522 12.5 1,940 18.8 933 8.8 1,007 29.8 222 1.8 785 40.8 247 31.5 538 10.8 FY08 1,340 (5.5) 626 19.9 1,966 1.3 909 (2.6) 1,057 5.0 139 (37.2) 918 16.9 342 37.3 576 7.0 FY09 1,627 21.5 765 22.2 2,392 21.7 1,104 21.5 1,288 21.9 390 179.9 898 (2.1) 245 27.3 653 13.5 FY10 2,195 34.9 965 26.0 3,159 32.1 1,350 22.2 1,810 40.5 374 (4.1) 1,436 59.9 390 27.2 1,046 60.1 FY11 3,221 46.8 897 (7.0) 4,118 30.3 1,705 26.3 2,413 33.3 646 72.8 1,767 23.1 500 28.3 1,267 21.2 FY12E 3,800 18.0 840 (6.4) 4,640 12.7 1,855 8.8 2,784 15.4 869 34.5 1,915 8.4 575 30.0 1,341 5.8 FY13E 4,115 8.3 956 13.9 5,072 9.3 2,110 13.7 2,962 6.4 1,123 29.2 1,839 (4.0) 597 32.4 1,242 (7.3)

Balance sheet
Y/E March (` cr) Share Capital Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY07 485 2,671 41,454 22.2 734 480 1,717 47,541 2,949 1,075 14,301 27,889 26.2 192 1,135 47,541 16.9 FY08 485 2,764 19.3 591 1,115 2,201 4,902 793 FY09 485 3,162 20.1 1,311 2,040 2,081 4,853 434 FY10 485 3,925 77,688 30.8 2,832 3,020 2,392 6,699 4,469 20,881 56,114 27.1 356 1,825 31.9 FY11 560 5,933 18.6 4,620 3,020 2,612 7,184 3,275 24,204 71,435 27.3 317 2,485 20.5 FY12E 560 6,948 19.0 5,475 3,413 2,997 7,128 3,226 FY13E 560 7,865 17.0 6,391 3,993 3,526 8,340 3,766

49,437 59,390

92,156 109,666 128,309

56,592 68,469

90,342 108,901 129,058 150,643

14,898 16,911 34,238 44,139 22.8 219 1,542 19.0 28.9 335 1,796 21.0

34,672 40,242 80,722 94,445 13.0 365 2,945 18.5 17.0 413 3,437 16.7

56,592 68,469

90,342 108,901 129,058 150,643

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage RoE 3.2 0.5 2.7 0.1 2.8 1.1 3.9 2.1 1.8 0.6 1.2 14.6 17.8 2.6 0.3 2.3 0.2 2.5 1.0 3.5 1.7 1.8 0.7 1.1 16.3 18.0 2.6 0.6 2.0 0.4 2.3 0.9 3.2 1.8 1.4 0.4 1.0 18.1 18.9 2.8 0.5 2.3 0.4 2.7 0.8 3.5 1.7 1.8 0.5 1.3 19.7 26.0 3.2 0.6 2.6 0.1 2.7 0.8 3.5 1.7 1.8 0.5 1.3 18.3 23.2 3.2 0.7 2.5 0.0 2.5 0.7 3.2 1.6 1.6 0.5 1.1 17.0 19.2 2.9 0.8 2.1 0.0 2.2 0.6 2.8 1.5 1.3 0.4 0.9 17.6 15.6 9.9 1.7 3.5 9.2 1.6 3.7 8.1 1.5 4.1 5.1 1.2 4.6 4.8 0.9 5.0 4.6 0.8 4.6 4.9 0.7 4.6 11.1 65.1 3.8 11.9 67.0 4.0 13.5 75.2 4.5 21.6 90.9 5.0 22.6 116.0 5.5 24.0 131.4 5.0 22.2 146.5 5.0 1.4 0.2 1.1 0.2 88.1 1.1 0.2 0.7 0.2 85.6 0.8 0.2 0.6 0.3 78.5 0.9 0.2 0.9 0.4 80.4 1.4 0.4 1.4 0.5 72.5 3.0 1.2 2.4 0.6 70.0 4.1 1.4 2.4 0.7 70.0 34.5 67.3 11.3 10.0 33.6 69.3 11.6 8.5 31.4 74.3 12.2 8.0 29.4 72.2 12.9 7.6 29.1 77.5 13.3 9.0 28.2 73.6 12.9 8.7 27.8 73.6 12.5 8.4 3.3 48.1 1.2 17.8 2.7 46.2 1.1 18.0 2.7 46.2 1.0 18.9 2.8 42.7 1.3 26.0 3.3 41.4 1.3 23.2 3.3 40.0 1.1 19.2 3.0 41.6 0.9 15.6 FY07 FY08 FY09 FY10 FY11 FY12E FY13E

November 14, 2011

Andhra Bank | 2QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Andhra Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 14, 2011

10