Sell SBI - A half-step forward, a full-step back - AMBIT

In a case of 'a half-step forward, a full-step back', State Bank of India (SBI) reported a disappointing set of numbers in 3QFY13, primarily on account of continued accretion to the stock of non-performing loans that called for continued higher provisions.

We await clarity around the status of assets that were re-classified as -standard loans' (from the stock of restructured loans) during the quarter and early evidence of stability in asset quality trends.

Whilst we make no changes to our full-year forecasts on the back of the 3QFY13 results, we remain SELLers in the absence of any immediate visibility around stability in asset quality trends with a sum-of-the-parts valuation of Rs2,130.

Source : Equity Bulls

Keywords