Buy State Bank of India; target of Rs 532: KR Choksey

KR Choksey is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 532 in its research report dated August 06, 2021.

Broker Research

August 13, 2021 / 12:12 IST

26 Aug, 2025 12:21

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KR Choksey's research report on State Bank of India

In Q1FY22, Net Interest Income increased by 3.74% YoY at INR 27,638 Cr. Domestic NIM for Q1FY22 at 3.15%, has declined by 9 bps YoY. Operating Profit increased by 5.06% YoY to INR 18,975 Cr in Q1FY22 from INR 18,061 Cr in Q1FY21. The operating profit excluding exceptional item increased by 14.85% YoY . Non-Interest Income for Q1FY22 at INR 11,803 Cr grew by 24.28% YoY. Net Profit of INR 6,504 Cr in Q1FY22. This represents increase of 55.25% YoY. Deposits grew at 8.82% YoY at INR 37,20,987 Cr. Credit Growth stood at 5.64% YoY at INR 25,23,793 Cr in Q1FY22. Net NPA ratio at 1.77% is down 9 bps YoY. Gross NPA ratio at 5.32% is down 12 bps YoY in Q1FY22. Capital Adequacy Ratio (CAR) has improved by 26 bps YoY to 13.66% as of June 2021.

Outlook

We value the bank at 1.4x FY23E P/ABV (earlier 1.2x) on an ABV of INR 325, taking the SOTP value to INR 532 per share (earlier INR 450 per share), implying a potential upside of 20.4% over the CMP. Accordingly, we upgrade the rating on the shares of SBI Ltd. to a “BUY”.

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