Comments
Karvy Stock Broking
SBI (Buy)
CMP: ₹277.70
Target: ₹319
SBI has given an improved performance in comparison to other PSU banks. SBI’s Q4FY15 results were above estimates as the earnings grew by 23 per cent y-o-y (28.6 per cent q-o-q) to ₹3,740 crore whereas asset quality improved sharply as gross non-performing assets and net non-performing assets reduced by 65 bps and 68 bps respectively to 4.25 per cent and 2.12 per cent. NII Net interest income grew by 14 per cent y-o-y (6.8 per cent q-o-q) led by stable net interest margins, even as advances grew at a slower pace. PCR improved to 69.1 per cent from 63.6 per cent in Q3FY15. Though slippages during the year were below expectations, fresh restructuring came as a negative surprise. We expect earnings to grow at a CAGR growth of 19 per cent over FY15-17E led by 13 per cent growth in advances over the period. We remain positive from a long-term prospective and recommend a ‘Buy’ rating and a sum-of-the-parts (SOTP) based target price of ₹319 (1.9x FY17E ABV).
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.