ICICI Direct recommended hold rating on State Bank of India with a target price of Rs 215 in its research report dated August 02, 2020.
ICICI Direct's research report on State Bank of India
SBI reported a strong operational performance with NII surging 16% YoY, whole bank advances up 8.6% YoY and Morat 2.0 at under 10%. SBI reported 9.5% of term loans in Morat 2.0 from 21.8% (by borrowers) and 23% (by value of term loans) in Morat 1.0. Total provisioning for the quarter was at Rs 12501 crore, which includes Covid-19 provisioning of Rs 1836 crore only, lower than other large banks.
We maintain HOLD with a target price at Rs 215, valuing the stock at 0.7x FY22E ABV standalone bank and assigning subsidiaries value of Rs 80 post holding company discount. The MD’s tenure ending by October 2020 may create some anxiety in the stock.
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