Prabhudas Lilladher's research report on SBISBIN reported relatively better quarter with NII growing 7% YoY to Rs142.5 bn, inline with our estimates, even as strong other income (boosted by repatriation gains) supported net earnings. Margins in domestic business increased by 3bp QoQ to 3.32% as CASA mix remains buoyant leading to 5bp QoQ moderation in deposit cost. Fresh slippages declined 24% YoY to Rs57.85bn (1.8% annualized) which coupled by healthy provisioning imparted stability to NPL profile. The bank restructured Rs25 bn of standard assets during the quarter however the outstanding restr. portfolio declined to 4% of total loans. We fine‐tune our earnings as we build in the recent capital infusion. We retain BUY with PT of Rs350.SBIN has aggressively cut base rate recently however we expect margins to sustain at around current levels as deposit portfolio continue to reprice lower on account of earlier cut in deposit rates. Moreover bank has increased the spreads in select products to which will help limit damage to lending yields. We fine‐tune our earnings as we build in the recent capital infusion and maintain BUY rating with PT of Rs350.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.
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