State Bank of India share price target

In the wake of mega merger, SBI stands to gain market share in fast-growing Retail and SME segments. Notably, it has been able to deliver relatively better operating performance vis--vis its peers despite elevated stress on balance sheet. Moreover, SBI has been able to clean-up its loan book effectively, which reasonably assures that it may surprise positively on operating and asset quality front, going forward. We maintain our BUY recommendation on the stock with an SOTP-based Target Price of Rs355 (valuing parent at 1.6x FY19 Adj. BV implying...

Maintain BUY with SOTP of Rs. 329 (1.6x Mar-19E core ABV of Rs 157 + Rs 78 subs value). SBIN began FY18 on a disappointing note (in line with corporate heavy peers), with a sharp rise in slippages (6.55% ann.) which management clarified was led by conservative recognition of stress in home and agri loans as well as one large corporate exposure. A weaker post-merger core was evident in the reduced PPoP (-31% QoQ), with loans down 3.4% and NIMs cracking 38bps on reversals. Mercifully, net stressed assets at 9.3% are lower than ICICIBC (10.3%), even if higher than AXSB (6.2%).

State Bank of India (SBI) yesterday informed exchanges that its subsidiary SBI Life Insurance Company has filed a draft red hearing prospectus with Sebi for an IPO. It will be an offer for sale of up to 12 crore shares representing 12% of total paid up capital of SBI Life that is a joint venture between SBI and BNP Paribas Cardiff. SBI would sell 8 crore shares (or 8% stake) while BNP Paribas would sell 4 crore shares (or 4% stake). SBI holds 70.1% stake in SBI Life while BNP Paribas holds a 26% stake. The balance stake is held by affiliates of KKR Asian Fund LP (1.9% stake)...

NII increased to Rs. 22643.33 Cr in Q4FY17 compared to Rs. 19659.36 Cr in Q3FY17

Advances grew by 7.3% YoY driven by both domestic loans (7.3% YoY) as well as international loans (7.3% YoY). Domestic loan (~82% of total loans) growth was mainly led by strong traction in the retail segment (21.2% YoY). However, large corporate and mid corporate reported tepid loan growth of 3.6% and 0.2% YoY, respectively as the bank continued to remain cautious in lending to mid and large corporates after witnessing high levels of stress from these segments. Going forward, we expect advances to grow at a healthy CAGR of 12% over FY17-19E led by robust momentum in retail loan growth. On liabilities side, deposits grew 18.1% YoY supported...

Post mega merger, SBI stands to gain market share in fast-growing Retail and SME segments. Further, the Bank has been able to deliver relatively better operating performance compared to its peers despite elevated stress in balance sheet. Moreover, the Bank has been able to clean-up its loan book effectively, which reasonably assures us that it will continue to surprise positively on operating and asset quality fronts from FY18E onwards. Realignment of PCR and assets classification of the associate banks at standalone level further boosts our confidence in SBI's performance, going forward. Rolling over our valuations to FY19E, we reiterate our BUY recommendation on the stock with an SOTP-based Target Price of Rs355 (valuing parent...

ICICI Securities Ltd | Retail Equity Research An in line performance on asset quality with slippages at | 9755 crore and QoQ addition in GNPA at | 4170 crore kept sentiments positive. Absolute GNPA was at | 112342 crore. GNPA ratio improved 33 bps QoQ at 6.9%, led by B/S growth. With increased...

SBINs 4Q operational performance was better than estimates, with strong loan growth ( 9% QoQ), NIM improvement ( 6bps), healthy fee growth ( 48%) and controlled opex (4%). Overall net stressed assets (6.9%) further declined ~5% QoQ, with a sharp drop in the watchlist (85bps) and continued improvement in PCR (66%, 300bps QoQ).

Standing strong, merger in news - upgrade target SBI has depicted strength in the current environment managing the asset quality and profitability well. Relatively lower exposure to stressed sectors/corporates is also keeping expectations high. We roll over valuations to FY19 and revise upwards the valuation of subsidiaries like SBI Life (post 3.9% stake sale in SBI Life at | 1755 crore). Hence, we...