Geojit Research' report on State Bank of India
Deposits showed healthy growth of 14% YoY, boosted by demonetization. Domestic deposits grew by 24% YoY driven by 35% increase in CASA deposits. Hence, the CASA ratio improved sharply by 385 bps YoY to 46.6%. However, SBI’s loan growth was subdued (↑4% YoY) due to 11% YoY decline in SME loans and muted growth in large corporate loan book.
Outlook
Hence, we continue to maintain a BUY rating on the stock with a revised upward target price (TP) of Rs 315 using the sum of the part (SOTP) methodology, where we value its standalone business at Rs 251 (P/ABV of 1.4x for FY19E) and subsidiaries at Rs 64.
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