Motilal Oswal has given Buy recommendation for State Bank of India recommended buy rating on the stock with a target price of Rs 600 in its researc with a target price of Rs. 600 in its research report issued on May 14, 2022
Motilal Oswal’s research report on State Bank of India
SBIN reported a 41% YoY growth in PAT at INR91.1b, aided by steady NII growth and controlled provisions, even as OPEX stood elevated, resulting in a miss in operating performance. GNPA/NNPA ratio improved by 53bp/32bp QoQ to 4%/1% as slippages remained controlled, further supported by recoveries and upgrades. Restructured book remained in check at 1.1%, while the SMA pool fell 15% QoQ to INR35.4b (13bp of loans). We largely maintain our earnings and expect a RoA/RoE of 0.9%/16.7% in FY24. SBIN remains one of our preferred picks in the sector.
We estimate credit cost to moderate to 0.9%, enabling 28% earnings CAGR over FY22-24. We expect SBIN to deliver a RoA/RoE of 0.9%/16.7% in FY24. The bank remains our conviction Buy in the sector. We revise our TP to INR600/share (1.2x FY24E ABV + INR195 from its subsidiaries).