Sharekhan's research report on State Bank of India
As credit growth has steadily improved, we believe banks with strong balance sheet, capital position and investments in digitalisation/technology are better placed to ride on the potential uptick in credit off-take. State Bank of India (SBI) has an edge in terms of loan book growth deriving from overall systemic improvement in credit demand. The management’s focus on building a granular loan portfolio with better underwriting practices has aided robust operating performance and profitability. The bank’s asset quality too has improved significantly over the past three years. With a correction of 10% from highs of Rs. 549, SBI presents a good investment opportunity.
The stock trades at 1.6x and 1.5x its FY23E and FY24E P/BV. We maintain a Buy rating on the stock with an unchanged SOTP-based PT of Rs. 650.