SIB's earnings were in-line with expectations but internal performance was weak given the large slippages during the quarter leading to higher provisions and interest reversals and coupled with slightly slower loan growth. PPOP growth of 5.7% YoY continues to remain sub-optimal and was driven by strong treasury gains. Slippages came in from corporate book mainly from the IL&FS recognition and another EPC account both accounting for Rs5.0bn (+75% of slippages). Stock trades at 0.7x Sep-20 ABV which is undemanding but few niggling issues like lower PCR, some stress book still remains in corporate (SMA) and slippage run-rate of Rs2.5bn will keep asset quality at focus and hence re-rating should be sometime away.
OutlookMaintain BUY with TP of Rs22 (unchanged) based on 1,0x Sep-20 ABV.
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