Angel Broking's report on State Bank of India (SBI)
"SBI has witnessed elevated asset quality pressure for quite some time now. Given the weak macro environment, we remain cautious on the incremental asset quality pressures for the bank. The bank's core strength has been its high CASA and fee income, which has supported its core profitability in the current challenging times. Its strong capital adequacy also provides comfort. In our view, its current valuation of 0.7x FY2015E ABV, after adjusting for subsidiaries over discounts the negatives for the bank. While we continue to believe that the economic turnaround story can be better played with large private banks, still investors with higher risk appetite can invest in banks like SBI which have strong capital adequacy and structurally strong core profitability). We recommend a Buy rating on the stock with a target price of Rs 1,848," says Angel Broking research report.
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