State Bank of India fell as much as 3.5 per cent to Rs 293.70, and was among the top drags on the NSE Index.

State Bank of India had on Friday reported a net loss of Rs 4,876 crore in the first quarter ended June 30, 2018, as provisions, including towards investment depreciation and staff expenses, soared. The bank had posted a net profit of Rs 2,006 crore in the year-ago period.

SBI Chairman Rajnish Kumar said the requirement for provisioning on account of the legacy NPA accounts had been largely taken care of. The bank expects to post a profit in the December and March quarters.

HDFC Securities says the loss is only “optically worrisome” as it comes at the end of the stress cycle. “Stage is now set for an uptick in loan growth and lower stress accretion,” it says.

HDFC Securities has maintained 'buy' on the stock, with a price target of Rs 340; it expects the stock to remain subdued despite longer-term positives.

Morgan Stanley expects large corporate lenders to move from impaired to growth fairly quickly. Motilal Oswal has raised concerns on SBI's exposure to power, but says the bank remains comfortable due to its largest exposure toward PSU entities and top-rated private corporates.

“Within PSU banks, SBI remains the best play on recovery in Indian economy,” says Motilal Oswal's Nitin Aggarwal. He has maintained 'buy' rating with a price target of Rs 360.

According to Thomson Reuters data, about 38 of 44 analysts covering the stock have 'buy' or higher rating; their median price target is Rs 345.

The stock had fallen 1.8 pct this year as of last close but has fared better than the 12.2 per cent decline in the Nifty PSU Banking index. Financials were the biggest drag on the NSE index in early trade.

(With inputs from Reuters)

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