HDFC Securities is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 310 in its research report dated February 13, 2017.
HDFC Securities' research report on State Bank of India
SBIN’s net stressed assets (incl. watch list) further fell 7% QoQ led by sharp drop in watch list and stable asset quality (NNPA +2%). SBIN’s watchlist (Rs 180bn, -31% QoQ) at a mere 1.2% is much lower vis-a-vis large pvt banks like ICICIBC (6%) and AXSB (3.7%).
SBIN remains the preferred pick amongst PSBs with a well-diversified book, capitalised B/S, superior PCR and lower net stressed book (vs. private peers as well). Further unlocking of non-core investments will provide a cushion to PCR/earnings. The subsidiaries merger will be a key monitorable. Maintain BUY with a SOTP of Rs 310 (1.6x Dec-18E core ABV of Rs 143 + Rs 81 subs value).
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