State Bank of India (SBI) share price rose 1 percent in the early trade on August 5 after the company declared its June quarter earnings.
On August 4, the company reported a 55.25 percent year-on-year (YoY) jump in the June quarter net profit at Rs 6,504 crore, up from Rs 4,189.34 crore in the same quarter of the previous year.
Its operating profit increased by 5.06 percent to Rs 18,975 crore in the quarter from Rs 18,061 crore in the year-ago period. The operating profit, excluding exceptional items, increased 14.85 percent.
Net interest income (NII), the difference between the interest income from lending activities and the interest paid to depositors, grew 3.74 percent YoY. The net interest margin (NIM) for the quarter stood at 3.15 percent.
Here is what brokerages have to say about the stock and the company after the June quarter earnings:
Macquarie | Rating: Outperform | Target: Raised to Rs 580
Macquarie has raised the target on the stock citing higher value in core business & subsidiaries. The asset quality performance is better than most peers and price to book value is attractive at current levels.
SBI is the top PSU pick by the broking house.
Goldman Sachs | Rating: Buy | Target: Rs 728
Goldman Sachs has maintained buy as strong Q1 with core operating performance was ahead of estimates. The lower-than-expected provisions lead to a beat on profit, while asset quality stood out in quarter where slippages were higher.
The recovery momentum has picked up & underlying book health seems intact. The broking firm increase earnings estimates by 2% on average over FY22-24.
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CLSA | Rating: Buy | Target: Rs 650
CLSA has maintained buy call after company reported decent performance in a tough quarter and continuing to deliver on asset quality.
The NII was a miss driven by yield pressure & a lack of growth. PPoP/PAT estimates cut by 1-3% and expect company to deliver a 14% RoE in FY22 & 15% from FY23.
Morgan Stanley | Rating: Overweight | Target: Rs 600
The bad loan formation at 1.0% of loans was broadly in-line, while slippages were higher and restructuring is lower versus our estimates.
The core PPoP missed estimate on lower margin & slower growth in balance sheet. Morgan Stanley reduces EPS estimate by 3-4%.
Jefferies | Rating: Buy | Target: Raised to Rs 550 from Rs 520
Jefferies has kept buy rating as managing asset quality was better, but growth may lag.
The profit led by other income & tad lower provision, while slippages at 2.8% of past loans were above expectations.
Broking firm see scope for upgrades in Q2 & Q3. However, despite stronger CASA, company has lagged on loan growth.
The company stays among key picks with buy rating, while trim FY22-23 EPS estimates by 4%, said Jefferies.
Prabhudas Lilladher | Rating: Buy | Target: Rs 540
SBI reported marginally better earnings of Rs65.0bn (PLe: Rs60.2bn) on combination of better other income, relatively lower opex & decreased provisions.
According to management has been already has been pull back as collection efficiency & customer outreach improved. Bank despite slightly slower operating performance is currently clocking 10% ROEs/0.7% ROAs and with improvement in credit cost ahead, ROEs/ROAs remains on track for 13%/0.85%.
At 09:20 hrs State Bank of India was quoting at Rs 456, down Rs 1.05, or 0.23 percent on the BSE.
The share touched a 52-week high of Rs 467.30 and a 52-week low of Rs 175.55 on 04 August, 2021 and 24 September, 2020, respectively.
Currently, it is trading 2.42 percent below its 52-week high and 159.76 percent above its 52-week low.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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