State Bank of India share price target

SBI is India's largest commercial bank with balance sheet size of ~INR39tn and a market cap of ~INR1.6tn.

State Bank of India is India's largest bank. The bank operates 21,959 branches globally and has a vast network of 58,599 ATMs/CDMs. It provides a wide range of financial services, such as insurance, credit cards and asset...

We recommend a BUY on STATE BANK OF INDIA with a Target Price of Rs 220, an upside of 12% from CMP of Rs 196 and Stop Loss Rs 184.

Asset quality was in line with fresh slippages at | 8105 crore vs. | 16525 crore QoQ led by NPA recognition in agri at | 5238 crore. Corporate slippage was lower at | 1561 crore vs. | 9467 crore (includes HFC) vs. | 3239 crore QoQ. GNPA saw a dip QoQ to | 149092 crore from | 159661 crore. Consequently, GNPA ratio declined 25 bps to 6.15% from 6.94% QoQ while NNPA ratio declined 42 bps QoQ to 2.2%. Overall PCR ratio increased QoQ to 83.62% from 81.73%. SMA1 and 2 (watch list) were at | 3594 crore (| 4424 crore) from | 3692 crore (| 3677 crore), respectively, in Q4FY20....

SBIN reported a modest quarter with weak NII growth (affected by higher interest reversals on Agri slippages), although stake sale gains from its cards subsidiary supported earnings. Overall, the bank maintains a PCR of 73% on Power sector NPAs. Total slippages declined to INR81.0b (v/s INR165.3b in 3QFY20) on decline across segments, with the Corporate segment accounting for INR15.6b, SME INR2.3b, and Retail INR6.0b. SBIN holds higher provision coverage on power NPAs SBIN currently does not have exposure to any large-ticket corporate account; thus, the slippage trajectory is expected to remain under 2% in the current COVID-19 crisis. Among the PSU banks, SBIN remains the best play on the gradual recovery in the Indian economy, with a healthy PCR of 65% (84% including TWO), robust capitalization (Tier 1 of ~11.0%), a strong liability franchise, and improved core performance in a very challenging environment.

Led by lower NII growth and higher provisions, SBI reported lower than estimated PAT of Rs 35.8bn (~Rs 16.7bn ex-SBI Cards stake sale). Higher agri slippages (Rs52bn) during Q4 impacted NII growth as the...

State Bank of India (SBI) posted mixed results, wherein, on one hand, operational performance came below expectations, but reasonable moratorium book and sequentially improved asset quality were positives. The bank has stated that there are around 23% customers who have opted for moratorium and have missed two or more instalment payments. This is reasonable, given the size and the nature of the bank's customer profile. Net interest income (NII) came in at Rs. 22,767 crore, down 18% q-o-q and flat y-o-y. There was an exceptional nature of gain of Rs. 2,731 crore (due...

State Bank of India (SBI) posted mixed results, wherein, on one hand, operational performance came below expectations, but reasonable moratorium book and sequentially improved asset quality were positives. The bank has stated that there are around 23% customers who have opted for moratorium and have missed two or more instalment payments. This is reasonable, given the size and the nature of the bank's customer profile. Net interest income (NII) came in at Rs. 22,767 crore, down 18% q-o-q and flat y-o-y. There was an exceptional nature of gain of Rs. 2,731 crore (due...

SBIN's Q4 PAT at Rs 36bn disappointed on weak NII growth and high provisions.

Rs50k has published its draft restructuring plan to stabilize the bank as financial position deteriorates and avoid depositors run on the bank. Draft scheme if accepted by investor will have to invest fresh capital into the bank with 49% stake and retain 26% shareholding in Yes for next three years. SBI has shown its willingness to invest in the bank and post due diligence will give its nod to RBI on the infusion by 9th Mar'20. RBI in its draft scheme has enhanced capital structure to Rs480bn with...