State Bank of India share price target

Continued trend in Asset Quality improvement, steady 1QFY21 performance and attractive valuation reinforce our conviction that the bank is well placed to fight impending stress. However, the transition of the bank's top post is likely to be a key overhang. The pointers which acknowledge our conviction are: 1) In 1QFY21, gross slippages declined to 39.1bn v/s 82.9bn in the previous quarter, which resulted in decline in headline NPA ratios with GNPA at 5.44% (v/s 6.15% in 4QFY20) and NNPA at 1.86% (v/s 2.23% in 4QFY20). 2) A positive surprise on Loan under moratorium which reduced to 9.5% of loan amount against 23% declared earlier. 3) Business growth in line with industry aided by strong domestic NIMs (3.24% v/s 2.97% in the previous...

We initiate Buy on State Bank of India (SBIN) with a target price of Rs 240 (SOTP basis, valuing core book at 0.6x FY22E ABV and Subsidiary value at Rs 110). SBIN with business size of ~Rs 57trn is the largest commercial bank with ~22.8/19.7% market share in deposits/ advances in India.

We initiate Buy on State Bank of India (SBIN) with a target price of Rs 240 (SOTP basis, valuing core book at 0.6x FY22E ABV and Subsidiary value at Rs 110). SBIN with business size of ~Rs 57trn is the largest commercial bank with ~22.8/19.7% market share in deposits/ advances in India.

NIMs climb up significantly, costs of funds come lower: The bank's NIMs increased to 3.24% (up 23 bps YoY/30 bps QoQ) as Cost of Funds also fell to 4.37% (down 48 bps YoY/23 bps QoQ) for Q1FY21 as the bank passed on the benefits of fallen interest rates to the customers by decreasing its MCLR. The bank's CASA increased to 43.83% (43.53% in Q4FY20), as the...

The bank further built COVID-19 provisions of INR18.4b, taking the total COVID related provisions to INR30b (15% on SMA accounts overdue on 29 NII grew 16% YoY (+17% QoQ) to INR266b with domestic NIMs improving by Other income grew 18% YoY, led by stake sale gains of INR15.4b in SBILIFE while opex growth moderated to 2% YoY (11% QoQ decline), and thus, C/I ratio improved to 50% (v/s 52.5% in 4QFY20). Total slippages declined to INR39.1b (0.7% annualized), facilitating a 13%/18% QoQ decline in GNPLs/NNPLs. PCR improved ~190bp QoQ to 67% Overall, 90.5% of term loans have paid two or more EMIs while the rest have paid less than two EMIs these include 4.2% in retail and SME, 3.3% in private corporates and the rest 2.0% are AAA or AA rated companies. Furthermore, moratorium availed in corporate accounts is much lower than expected while total COVID-19 provisions of INR30b and lower SMA book of INR17.5 (0.1% of loans) provides comfort.

State Bank of India (SBI) posted encouraging results with asset-quality improvement on a sequential basis, even as operational performance came mixed, aided by one-time gain of stake sale benefit of Rs. 1,539 crore from the subsidiary. However, weak other income and higher provisions expenses resulted in PPOP and PAT missing estimates. Net interest income (NII) came at Rs. 26,642 crore, up 16.1% y-o-y and 17% q-o-q, in line with estimates. Non-interest income came at Rs. 7,957 crore, flat y-o-y but was down by 40% q-o-q, mainly as the quarter saw impact of fee and charge waivers amidst pandemic. However, the key is the balance sheet strength and asset quality, on which parameters the bank fares well....

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....