State Bank of India - March 2013 Results Preview - Motilal Oswal

- Business growth is expected to be above industry average, with loan growth at 20% YoY and deposit growth at 17% YoY.

- Fee income growth is expected to be flat. However, higher trading gains of INR4.3b, compared to a loss of INR263m, would translate into overall non-interest income growth of 9%+ YoY.

- While core income is expected to be flat YoY, increase in employee expense (factored INR9b on account of wage revision) will lead to 20% YoY decline in core operating profits.

- Net slippages are expected to decline, as gross slippages are expected to be contained and upgradation/recoveries improve.

- Overall PAT is expected to decline 10% YoY, led by decline in core profitability, even though lower provisions would provide a cushion.

- Excluding subsidiaries, the stock trades at 0.8x FY15E consolidated BV and 5.4x FY15E EPS. Buy.

Source : Equity Bulls

Keywords