State Bank of India share price target

Sequential increase in fresh slippages was primarily due to higher slippages from SME (Rs23bn), Agri (Rs15bn) and retail (Rs12bn) segments. Maximum of these slippages are seasonal in nature and tend to increase in 1Q. On the other hand, mid-corporate segment witnessed decline in fresh slippages formation Contraction in NIM was primarily due to 30bps reduction in base rate along with inclusion of one-off interest from income tax refund in 4QFY15 Loan book contraction was primarily due to subdued activity in large and midcorporate segments. Loan growth is expected to improve in 2HFY16E The bank's SLR holding stood at ~28% v/s regulatory requirement of 21.5%...

SBI is one of the few PSU banks which has reported an improvement in its asset quality in FY15. In a tough economic scenario, the bank has reported GNPA decline from 5% in Q4FY14 to 4.3% in Q4FY15 led by lower slippages during the year. Advances growth remained on the lower side (7.5% YoY) as the bank focused on cleaning up its books. Going ahead, along with a gradual improvement in the economy, we expect the improved performance of the bank to continue. SBI is also one of the few PSU banks, who are adequately capitalized with a CAR of 12% with a tier I capital of 9.6%.

ABVPS of Rs187 (Subsidiary value of Rs30 per share) and 1.2x FY17e ABVPS of Rs222. The Source:PhillipCapitalIndiaResearchEst. uptick in economic activity will improve the operational efficiency and reduce credit cost translatingintoaearningsCAGRof24%over FY1517andRoAimprovementof~20bpsto ManishAgarwalla(+912266679962)...

SBIN posted QoQ improvement in headline asset quality (G/NNPA -9/20%) along with a sharp rise in PCR ( 557bps). However, gross stressed asset additions increased QoQ to 5.3% ann., led by a ~3x rise in restructuring.

SBI's Q4FY15 results were above estimates as the earnings grew by 23% YoY (28.6% QoQ) to Rs 37.4 bn whereas asset quality improved sharply as GNPA and NNPA reduced by 65 bps and 68 bps respectively to 4.25% and 2.12%. NII grew by 14% YoY (6.8% QoQ) led by stable NIMs however advances grew at a slower pace.