Brokerage - Motilal Oswal | Rating - Buy | Target - Rs 375
State Bank of India reported a weak quarter with net slippages spiking up (adversely impacted by divergence). On the positive side, 89 percent of corporate slippages came from stressed assets, resulting in a decline in net stressed assets to 8.4 percent of total loans.
Core pre-provisioning operating profit held stable led by modest growth in core other income while NII growth stood flat on sequential basis. While the core portfolio performance remains healthy, cleanup of residual stressed assets will remain an overhang in near term.
It cut FY18/19/20 earnings estimates by 75/20/22 percent respectively and build in capital infusion announced by the government. It revised price target to Rs 375 and maintain Buy rating.
Brokerage - Kotak Securities | Rating - Buy | Target - Rs 400
Kotak Securities has maintained Buy rating on the stock with revised target price upward to Rs 400 from Rs 375 per share as the bank remained well placed to benefit from non-performing loans (NPL) resolution cycle.
Resolutions & stronger balance sheet will drive re-rating, it feels.
Growth, capital & profitability are key focus points hereon.
Brokerage - IIFL | Rating - Buy | Target - Rs 360
IIFL has upgraded the stock to Buy with 12-month target price at Rs 360 per share.
SBI is estimated to post a significant recovery in its return on equity over FY18-20 supported by acceleration in loan growth, recovery in net interest margins, derivation of cost productivity / efficiencies and a sharp decline in the credit cost.
Return on equity is expected to cross 10 percent in FY20 enabled by an improvement in return on assets to 0.8 percent. This will enhance bank's ability to raise capital from market at better valuation in the coming years.
The subsidiaries such as SBI MF, SBI Life, SBI Cards and SBI Caps are doing extremely well and their contribution to SBIs consolidated valuation is on the rise.
Brokerage - B&K | Rating - Buy | Target - Rs 400
While maintaining Buy rating on the stock with target price at Rs 400 per share, B&K said the NPA formation has largely peaked.
It expects return on assets / return on equity to improve from a low of 0.1/1 percent in FY18 to 0.7/11 percent in FY20.
Valuations are reasonable at 1.2x FY19/1X FY20 adjusted for subsidiaries/joint venture valuations.
Brokerage - IDFC Securities | Rating - Neutral | Target - Rs 310
IDFC Securities has downgraded SBI to Neutral with a target price at Rs 310 per share, building in return on assets of 0.5 percent for FY19 & 0.8 percent for FY20.
Uncertainty on non-steel National Company Law Tribunal (NCLT) cases will weight negatively on the stock, it feels.
Brokerage - IDFC Securities | Rating - Outperform | Target - Rs 873
IDFC Securities has Outperform call on the stock with a target price at Rs 873 per share, saying the strategy to create a long-term JV with Thyssenkrupp is a long-term positive.
European performance decline should reverse in Q4, it believes. The research house has upgraded FY19 EBITDA estimate by 12 percent due to higher steel prices.
Brokerage - Kotak Securities | Rating - Buy | Target - Rs 200
Kotak Securities has upgraded the stock to Buy from Add and raised target price to Rs 200 from Rs 195 per share, saying the changes implemented in recent years are visible on earnings as well.
Comfortable coverage ratio & resolution can result in lower impact on provisions.
Sharp rise in margins & robust loan growth lifted NII growth. Strong traction in loan growth & stable asset quality remain key positives for the bank, it feels.
Brokerage - IDFC Securities | Rating - Outperform | Target - Rs 21
While having an Outperform call on the stock with a target price of Rs 21 per share, IDFC Securities said the company showed strong execution in a challenging environment.
Strong orderbook bodes well for earnings recovery in FY19, it added.
Stock is trading at attractive valuations.
Brokerage - IDFC Securities | Rating - Outperform | Target - Rs 1,138
Sun TV Network has entered a high-growth phase, driven by revival in advertising revenue growth. Company has better return ratio & free cash flow to EBIT ratio than Zee Entertainment.
Brokerage - Jefferies | Rating - Buy | Target - Rs 465
Jefferies feels the valuations are inexpensive at 8.3x FY19 P/E. Realisations remain key for earnings & the share price, it said.
Brokerage - Nomura | Rating - Neutral | Target - Rs 360
Nomura feels the stronger oil price will support near-term earnings. Operationally, there’s still not much to cheer, it said.
Brokerage - IDFC Securities | Rating - Outperform | Target - Rs 240
While having Outperform call on the stock with a target price of Rs 240 per share, IDFC Securities said the stock trades at attractive 8.5x FY19 EPS estimates.
Market is overcompensating for the near-term stress, it added.
Brokerage - Jefferies | Rating - Buy | Target - Rs 225
Jefferies said it kept Buy rating noting inexpensive valuations at 8.6x FY19 P/E.
Brokerage - IDFC Securities | Rating - Outperform | Target - Rs 515
While having Outperform call on the stock with a target price of Rs 515 per share, IDFC Securities said it remained positive on company's prospects over FY18-20.
It sees Margin steadily improving for marketing as well. Consolidated EPS should grow at 6 percent CAGR over FY18-20, it feels.
Brokerage - Jefferies | Rating - Underperform | Target - Rs 370
While having Underperform call on the stock with a target price at Rs 370 per share, Jefferies said higher margins are the key upside risk and it expects EPS to fall in FY17-19.
Brokerage - IDFC Securities | Rating - Outperform | Target - Rs 565
Core operating metrics look set for better times over 15-18 months. Kochi will boost refining business over FY18-20.
Brokerage - Nomura | Rating - Buy | Target - Rs 565
Nomura continued to like all oil marketing companies. Kochi refinery is still in ramp-up phase & has not fully stabilised, it said.
Brokerage - Jefferies | Rating - Underperform | Target - Rs 425
Jefferies has assigned Underperform rating on the stock with a target price at Rs 425 per share as headline numbers beat estimates but core EBITDA was very weak.
It expects Q4 to be aided by rise in auto marketing and expects FY19 EPS estimates to be softy before a pick-up in FY20.
Brokerage - Morgan Stanley | Rating - Equal-weight | Target - Rs 185
Morgan Stanley said growth trends were strong across businesses. Earnings miss was due to investments in NBFC & new businesses.
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