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Last Updated : Aug 03, 2020 04:12 PM IST | Source: Moneycontrol.com

Buy State Bank of India; target of Rs 276: Prabhudas Lilladher

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.

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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.


Outlook


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


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First Published on Aug 3, 2020 01:50 pm
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