SIB’s loan book showed a steady growth of 15.5% YoY in 2QFY19 (2.2% QoQ) in line with CSEC’s estimate of 15.2% YoY. The growth was predominantly led by Retail (33.5% YoY, 5.9% QoQ) and Gold loans (13.2%YoY, 3.8% QoQ) segments. Management has guided that their focus will continue to be on Mid-corporate and MSME segments and the loan book would grow in the range of 18-20% in 2HFY19.
OutlookHowever, the increased exposure to below BBB rating borrowers poses a cause of concern. The Stock currently trades at 0.6x P/ABV of FY20E. We maintain a BUY rating on the stock and revise the target price to INR 22, assigning a 0.9X P/ABV FY20E.
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