Buy State Bank of India, target price Rs 530: Motilal Oswal

Motilal Oswal has buy call on with a target price of Rs 530. The current market price of State Bank of India is Rs 432.5. Time period given by analyst is one year when State Bank of India price can reach defined target.

State Bank of India, incorporated in the year 1955, is a banking company (having a market cap of Rs 387774.37 Crore).

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 103430.64 Crore, up 6.43 % from last quarter Total Income of Rs 97182.15 Crore and up 9.78 % from last year same quarter Total Income of Rs 94218.82 Crore. The bank reported net profit after tax of Rs 6125.52 Crore in latest quarter.

Investment Rationale

• Credit cost to remain high to keep balance sheet resilient
• Restructuring book and impact on asset quality to be key to assessing impact of second wave
• Business growth to moderate on a QoQ basis
• Margins to remain stable at ~2.9%; traction in fee income and opex trajectory -monitorables

Promoter/FII Holdings
Promoters held 56.9 per cent stake in the company as of March 31, 2021, while FIIs held 11.1 per cent, DIIs 24.3 per cent and public and others 7.7 per cent.