Buy SBI; target of Rs 3000: PLilladher

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Prabhudas Lilladher`s research report on SBI“SBI’s asset quality has improved on some ARC sales and better recoveries, though slippages are still high but overall stress seems to be diminishing bringing stability to asset quality. Opex efficiencies are now kicking in on measures of correction in overheads and also is best placed on pension and wage provisions which will keep Opex growth lowest among peers. SBI’s PPOP grew ~16% YoY in Q1FY15 on better opex efficiency as Bank made corrective adjustments to overheads, and employee expenses remained flattish even after providing additional pension provisions and wage hike provisions. Margins dipped marginally by 4bps QoQ due to lower overseas margins (down 34bps QoQ) as recent bond raising was deployed in short-term yielding loans. Management indicated improvement in international NIMs and with lower interest reversals in FY15, indicating that maintaining margins at current level will not be a challenge.” “Slippages did inch up to 3.2% in Q1FY15 from 2.7% seen in Q4FY14 on stress from midcorporate segment and Agri segment. Management has indicated overall stress to be diminishing. ARC sales of Rs67bn were indeed large, of which, Rs56bn were from NPAs. The Bank has also provided Rs0.9bn on provisions shortfall on consideration of sale to ARC. The Bank restructured loans of Rs57bn in Q1FY15. Asset quality has stabilized with better recovery & upgrade trends though slippages have been high but we expect them to move down in H2FY15. We have been maintaining our view that SBI is best placed on provisions and less net additions to staff will keep employee expenses under check which will result in lowest Opex growth among peers in FY15. We have upgraded our rating from Accumulate to ‘BUY’ with TP of Rs3,000,” says Prabhudas Lilladher research report. 

For all recommendations, 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.

Read More