HDFC Securiites has maintained 'Buy' on Oriental Bank of Commerce (OBC) with target price of Rs 362 as against current market price (CMP) of Rs 325 in its report.

Commenting on the investment rationale, HDFC Securities said, ''We met OBC's management recently and sifted through its FY14 Annual Report.

Ground realities remain challenging as opposed to the recent sentiment lift (2) Mgt expects loan growth 15% in FY15 after 8% in FY14, but 1QFY15 is tepid NIM remains a higher priority than growth; we expect an improvement from the 2.8% posted in FY14, slippages/restructured guidance maintained at Rs 7.5-8 billion for 1QFY15, With volatile G-Sec yields, OBC expects to improve treasury gains from Rs 267 million in 4QFY14; mgt intends to use this mostly to improve PCR, which stood at a credible 60% in FY14, fund raising of Rs 5 billion is likely from GoI, followed by a possible QIP, HR remains a concern for PSU banks and persistent stress in large accounts is the proverbial Damocles' sword for the entire banking industry.

In line with weak macros, OBC has reported higher stressed assets. Our positive stance on the bank is premised on its calibrated growth approach over the last two years (in a weak environment) and stable NIM/PPoP margin (despite volatile interest rates).

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