BSE Code: | NSE Code: | ISIN: | Sector:
Research Report Detail
|Report Date||Call||Price@Call||Target Price
|Current Status||Time Horizon|
|Open|| Long (1Y)
Nomura maintains buy on State Bank of India 330
SBI's 1QFY18 performance was weaker than we expected, with slippages of INR300bn and INR179bn of slippages from SME/retail/Agri. While higher granular slippages were expected, the quantum was clearly a negative surprise. Also a NIM drop of around 40bp q-q was high and guidance of just 10-15bp improvement from current levels is not inspiring. With the weak show on NIM and asset quality, near-term catalysts are limited, in our view. The key over the next 6-12 months will be recovery from the granular accounts (guided INR130bn of recovery/upgrades) and NIM improvement from current levels.We expect normalised ROEs of around 11.5% by FY20F now and hence maintain our Buy rating. Our TP of INR330/share implies 1.1x Mar-19F adjusted book.