State Bank of India (Buy) - Avendus

We lower the PAT forecast for FY14f-FY16f by up to c7% to factor higher provisions, investment depreciation and lower NIM. We estimate the provision for investment depreciation at 0.35% of the Gsec at the beginning of the year, as against the large write-back in the preceding year. While NIM may contract in FY14f, SBIN may be better placed than peers due to 86% of domestic deposits comprising CASA and retail term deposits. While the stock underperformed the Sensex by 21%, it has outperformed the CNXPSBK by c9% in the last three months. We rollover the TP to Sep14 and lower it marginally to INR2,080. The TP values the stock at a one-year forward adjusted P/B of 1.03x. We maintain a Buy rating.

Source : Equity Bulls

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