Accumulate SBI; target Rs 2595: Angel Broking

160854 Investors following SBI. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate SBI; target Rs 2595: Angel Broking

Angel Broking is bullish on State Bank of India (SBI) and has recommended accumulate rating on the stock with a target of Rs 2,595 in its February 16, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Sell Cipla; target Rs 318: Emkay Accumulate Aurobindo Pharma; target Rs 139: Emkay Planning to buy on dips? ICICIdirect suggests 9 stocks ALSO READ See previous views by Angel Broking See what other Experts & Brokerages are saying about SBI See messages about SBI SBI BSE | NSE 30/05/12 Are Mutual Funds betting on SBI?

Angel Broking is bullish on State Bank of India (SBI) and has recommended accumulate rating on the stock with a target of Rs 2,595 in its February 16, 2012 research report.

"For 3QFY2012, SBI's standalone net profit increased by 15.4% yoy to Rs 3,263cr, which were above street estimates. Sequential expansion in both domestic (32bp) and foreign NIM (4bp) was the major positive from the result. However, the asset quality continued to disappoint with gross and net NPA levels increasing sequentially by 18.1% and 16.6%, respectively."

"During 3QFY2012, the bank's net advances grew by 16.5% yoy (up 7.0% qoq), while deposits accretion was moderate at 13.9% yoy (up 2.9% qoq). The reported CASA ratio as of 3QFY2012 stood at 47.9% (47.8% in 2QFY2012 and 48.2% in 3QFY2011). The bank's NIM increased for both domestic (up by a strong 32bp qoq to 4.4%) and foreign operations (up by 4bp qoq to 1.8%) on account of better yields. Adjusting for net loss on investments of Rs 221cr, non-interest income declined by 9.6% yoy. On the asset-quality front, the bank's annualised slippage ratio for the quarter remained above 4%+ levels (4.3%). Pressure on slippages was high from the agri, SME as well as corporate segment, while major industries contributing to higher slippages were aviation (Rs 1,184cr), iron and steel (Rs 667cr vs. Rs 347cr in 2QFY2012) and textiles (Rs 462cr vs. Rs 289cr in 2QFY2012)."

"At the CMP, the stock is trading at 1.6x FY2013E ABV (adjusting for value of subsidiaries). The bank's asset quality has been under stress lately, however the pressures are expected to ease off going forward as domestic macro headwinds subside. Also, considering the bank's dominant position and reach, strong savings market share gains, high fee income and superior earnings quality, and recent impressive performances on margin front, we recommend an Accumulate on the stock with a target price of Rs 2,595," says Angel Broking research report.

Public holding more than 90% in Indian cos

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.

To read the full report click on the attachment