Moneycontrol
Feb 15, 2018 02:28 AM IST | Source: Moneycontrol.com

Buy State Bank of India; target of Rs 350: Prabhudas Lilladher

Prabhudas Lilladher is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 350 in its research report dated February 09, 2018.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on State Bank of India


SBI’s earnings disappointed with losses of Rs24.2bn on the back of twin impacts of rising bond yields and provisions due to high divergence on NPA with RBI. This led to fresh slippages of Rs258.4bn (1.25% of loans). High slippages also impacted top line growth with NII growing only 5% YoY (flattish QoQ) but margins saw marginal uptick sequentially. Also, Tier ‐ I got impacted by ~55 ‐ 60bps QoQ as Bank had to reverse the effect of revaluation on certain leased assets impacting reserves and Tier ‐ I by Rs112.1bn along with P&L losses. We believe, provision will remain high for ageing and remainder of NCLT referrals but as management guided on lowering slippage rate & consequently credit cost in FY19 will help lift earnings. We believe critical Tier ‐ I would not be an issue on ability to raise capital.


Outlook


Retain BUY with revised TP of Rs350 (from Rs386) based on 1.6x Sep ‐ 19 ABV & SOTP.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Sections
Follow us on
Available On