Sharekhan's research report on State Bank of India
We continue to see outperformance in the stock, given SBI is a sector proxy that benefits from its strong deposit franchise and favorable sector tailwinds. We believe there is an upside risk to margins as transmission of MCLR rates (~100 bps) in corporate loans is yet to happen, which provides sufficient headroom for NIM expansion, offsetting any increase in cost of deposits. Healthy loan growth momentum is expected to sustain, led by robust retail loan growth (homes loans and unsecured loans) and resurgence in corporate credit.
Outlook
At the CMP, SBI trades at 1.2x/1.0x/0.8x its FY2023E/FY2024E/FY2025 core ABV. We retain our Buy rating on SBI with an unchanged PT of Rs. 710. SBI remains our top pick among PSU banks with strong balance sheet strength and improved core operating metrics.
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State Bank of India- 02 -12-2022 - khan