Feb 14, 2017 01:53 PM IST | Source: Moneycontrol.com

Buy State Bank of India; target of Rs 310: HDFC Securities

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.

Buy State Bank of India; target of Rs 310: HDFC Securities

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%).

Outlook

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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