Buy State Bank of India; target of Rs 414: Edelweiss

Edelweiss's research report on State Bank of India

At the State Bank of India’s (SBI) “Subsidiaries Day”, top management of each of the subsidiaries presented their business performance and enunciated future strategies. Their clear intention is to capitalise on the burgeoning growth opportunities (both organic/inorganic) by leveraging on the financialisation (benefiting SBI AMC, life insurance and capital markets), democratisation (for RRBs) and digitisation (SBI Cards) trend in the financial services space.

Outlook

However, right intent and focus to create value in its non-banking subsidiaries can be a more stable and scalable vector for bank’s overall value. Ascribing INR82/share to its subsidiary businesses, the stock trades at 0.7x adjusted book and we maintain ‘BUY/SO’ with SoTP-based TP of INR414. For all recommendations report, click here

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