Sharekhan has given Buy recommendation for State Bank of India with a target price of Rs. 460 in its research report issued on Feb 04, 2021
Sharekhan’s research report on State Bank of India
SBI posted strong results with mixed operational numbers, but asset quality performance improved; loan growth too outperformed system growth, indicating market share gains. Strong asset quality performance, GNPA declined 217 bps y-o-y and 51 bps q-o-q to 4.77%. NNPA ratio at 1.23% is down 142 bps y-o-y and 36 bps q-o-q; Proforma GNPA / NNPA too were well contained. Asset quality is finally emerging from the shadows; we believe that a strong balance sheet, market-share gains can drive re-rating of stock.
Stock trades at 1.6x / 1.3x its FY2022E / FY2023E ABVPS, which we believe are reasonable. We maintain a Buy on the stock with a revised SOTP-based price target (PT) of Rs. 460.
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