State Bank of India - Q1FY21 Result Update - ICICI Securities

SBI reported a strong operational performance with NII surging 16% YoY, whole bank advances up 8.6% YoY and Morat 2.0 at under 10%. SBI reported 9.5% of term loans in Morat 2.0 from 21.8% (by borrowers) and 23% (by value of term loans) in Morat 1.0. Total provisioning for the quarter was at Rs. 12501 crore, which includes Covid-19 provisioning of Rs. 1836 crore only, lower than other large banks.

Valuation & Outlook

Legacy book being provided for, wage provision needs also limited and scope for NIM expansion augur well for the bank's future earnings. Covid-19 provisions and hangover of Yes Bank are keeping the stock performance muted. Expect return ratios at RoA at 0.5% and 9.1% RoE by FY22E. We maintain HOLD with a target price at Rs. 215, valuing the stock at 0.7x FY22E ABV standalone bank and assigning subsidiaries value of Rs. 80 post holding company discount. The MD's tenure ending by October 2020 may create some anxiety in the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SBI_Q1FY21.pdf

Shares of STATE BANK OF INDIA was last trading in BSE at Rs.192.1 as compared to the previous close of Rs. 191.45. The total number of shares traded during the day was 3185200 in over 17655 trades.

The stock hit an intraday high of Rs. 194.5 and intraday low of 190.15. The net turnover during the day was Rs. 613504341.

Source : Equity Bulls

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