Prabhudas Lilladher is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 276 in its research report dated July 31, 2020.
Prabhudas Lilladher's research report on State Bank of India
SBI’s earnings of Rs41.9bn was strong beat on our estimate (PLe: Rs25.8bn) on back of very strong NII growth of 16% YoY/17% QoQ which also drew beat in core PPOP. Bank’s provisions were slightly higher on Rs52bn towards fraud related a/c & Rs18bn of COVID provisions with total o/s now at Rs30bn. Moratorium book with less than two EMIs paid came down to sub 10% of term loans with retail/SME at 4.2% & corporates at 5.3% from 25% in May end. Asset quality was comforting but due to moratorium/standstill slippages were lower by 50% QoQ to Rs39bn, although we need to watch out for slippages once moratorium ends. Adequate capital at this juncture, strong liabilities with pricing power & lower provisions on book should help improve profitability.
Retain BUY rating with revised TP of Rs276 (from Rs254) based on 0.7x (from 0.8x) core Mar-22 ABV & Rs150 for Subs as we increase fair value in cards business.
For all recommendations report, 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.