Geojit's research report on State Bank of India
Q4FY21 Net interest income improved 18.9% YoY, aided by strong liability franchise, deposits growth outpaced credit growth and better asset quality management. Operating profit came in at Rs. 19,700cr (+6.7% YoY; +13.7% QoQ) despite of higher employee costs on account of wage revision, Increase in DICGC premium and waiver of account management fee; PAT rose 80.2% YoY to Rs. 6,451cr. Slippage ratio at 1.18%, among the best with fresh slippages at Rs. 28,564cr in FY21 (vs. Rs. 49,647cr in FY20). Personal retail slippages at Rs. 3,287cr; ratio at 0.44% in FY21 with low risk & resilient portfolio.
Outlook
Backed by well-diversified loan portfolio and strong balance sheet with lower exposure to high risk sectors, we believe that the banks’ valuation remains attractive and hence we reiterate our BUY rating on the stock with a revised target price of Rs. 510 based on SOTP valuation.
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