ICICI Direct has given Buy recommendation for State Bank of India with a target price of Rs. 410 in its research report issued on Feb 05, 2021

ICICI Direct’s research report on State Bank of India

SBI’s asset quality picture within guidance is a positive surprise. Q3 slippages around Rs 2073 crore and new restructuring in Q3 were at Rs 18125 crore. This brings stressed assets status as on December 2020 at Rs 41000 crore within the guided Rs 60000 crore i.e. 2.5% of loans as total stress including slippages. Total provisioning for the quarter was at Rs 103420 crore, which includes Covid-19 provisioning of Rs 5885 crore. Overall Covid provision now is at Rs 12976 crore.

Outlook

We expect RoA of 0.6% and RoE at 9.5% by FY22E and scope to improve gradually. We, therefore, revise our rating from HOLD to BUY with a revised target price of Rs 410 (earlier Rs290),

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