Motilal Oswal's research report on State Bank of India
State Bank of India (SBIN)’s Annual Report highlightsthe strong progress that the bank is making in fortifying its balance sheet and restoring RoEs back to the longterm average of 15%. The focus remains on building a superior loan book, while maintaining strong underwriting as evident in its lower stressed assets and high PCR. Corporate segment reported ~5x YoY jump in PBT to INR270b, underscoring the structural improvement in corporate business. The segment thus contributed ~51% of total profits in FY22 v/s 17% in FY21. Retail PBT grew 33% YoY in FY22 v/s 48% YoY decline in FY21, adversely affected by pandemic-induced provisions. On the digital front, YONO continued to set new records with ~112m downloads and ~48m registered users, along with average daily logins of ~16.6m as of FY22. SBIN sanctioned 1.14m digital loans worth INR211b in FY22 and overall, 36% of its retail asset accounts and 63% of SA accounts were opened through YONO in FY22.
Outlook
SBIN reported further improvement in asset quality with PCR improving to 75% (85% on the corporate book) in FY22. Controlled restructuring (1.1%), low SMA pool (13bp) and 100% coverage on SR portfolio provide comfort and would drive a sustained reduction in credit cost. We reiterate BUY with a TP of INR600.
More Info
At 17:30 State Bank of India was quoting at Rs 447.80, up Rs 1.90, or 0.43 percent.
It has touched an intraday high of Rs 449.30 and an intraday low of Rs 443.30.
It was trading with volumes of 1,101,886 shares, compared to its thirty day average of 690,907 shares, an increase of 59.48 percent.
In the previous trading session, the share closed down 3.44 percent or Rs 15.90 at Rs 445.90.
The share touched its 52-week high Rs 549.05 and 52-week low Rs 400.30 on 07 February, 2022 and 21 June, 2021, respectively.
Currently, it is trading 18.44 percent below its 52-week high and 11.87 percent above its 52-week low.
Market capitalisation stands at Rs 399,644.10 crore.
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