Prabhudas Lilladher's research report on State Bank of India
We recently interacted with the management to understand 1) credit outlook, 2) changes in credit appraisal 3) asset quality view and 4) opex trajectory. The bank is optimistic on loan growth, as improving economic activity and tight liquidity may support its credit offtake. New proposals and unavailed limits within corporate total to Rs6trn, while retail momentum might continue. With cash flows normalizing for SMEs, the ECLGS/OTR pools are also performing well. Underwriting has strengthened with induction of non-sales personnel in credit appraisal and robust credit research across 36 sectors. Asset quality may remain under control and target is to keep credit costs below 1%. While we slightly tweak our estimates, we expect a core PAT CAGR of 20% over FY22-25E.
Outlook
Retaining the multiple at 1.4x, we roll forward to core Sep’24 ABV, raising SOTP based TP from Rs620 to Rs650. Maintain ‘BUY’.
More Info
At 11:44 hrs State Bank of India was quoting at Rs 532.50, up Rs 12.85, or 2.47 percent.
It has touched an intraday high of Rs 535.80 and an intraday low of Rs 528.00.
It was trading with volumes of 149,930 shares, compared to its thirty day average of shares, a decrease of percent.
In the previous trading session, the share closed down 2.15 percent or Rs 11.40 at Rs 519.65.
The share touched its 52-week high Rs 578.65 and 52-week low Rs 425.00 on 15 September, 2022 and 08 March, 2022, respectively.
Currently, it is trading 7.98 percent below its 52-week high and 25.29 percent above its 52-week low.
Market capitalisation stands at Rs 475,235.57 crore.
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