Moneycontrol Be a Pro
Get App
Last Updated : Nov 04, 2019 03:27 PM IST | Source: Moneycontrol.com

Buy State Bank of India; target of Rs 413: Prabhudas Lilladher

Prabhudas Lilladher is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 413 in its research report dated October 30, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on State Bank of India


SBI hosted an investor day showcasing its business strategy and future roadmap in the medium term. Management remains highly focused on improving its core operating profit & reaching ROAs towards 1.0% by end of FY21. Key enablers will be (i) improving NIMs from lower cost of funds, lower interest reversals and risk based pricing on loans (ii) steady fee income generation & opex control below 10% or C/I of 45% (from current 50-55%) and (iii) credit cost of <100bps with slippages of 1.5% assuming LGDs of 50-60% in base line scenario. Bank on consolidated basis also sees huge value addition by subsidiaries in SBI eco system for non-lending financial products and will monetize the same ahead. Bank's baseline scenario of PPOP Rs650bn & Rs750bn in FY20/FY21E can be achievable but we vary on ROAs of 0.9%-1.0% by FY21 as timing of provisions on new stressed assets will have to be upfront & write-back from recoveries can be delayed despite large cushion available.


Outlook


We retain BUY with revised TP of Rs413 (from Rs396) as we slightly up valuations in subsidiaries with bank estimates unchanged.

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.



Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Nov 4, 2019 03:27 pm
Loading...
Sections
Follow us on
Available On