State Bank of India, incorporated in the year 1955, is a banking company (having a market cap of Rs 365462.84 Crore).
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 93266.94 Crore, down -9.83 % from last quarter Total Income of Rs 103430.64 Crore and up 6.00 % from last year same quarter Total Income of Rs 87984.33 Crore. The bank reported net profit after tax of Rs 7379.91 Crore in latest quarter.
Investment Rationale
SBI posted a steady operational performance in Q1FY22 with better-than-expected NIMs of 2.9% vs. estimates of 2.7%. NII, however, was in line with estimates due to flattish growth impacted by lockdown. Other income was up 24% YoY to Rs 11803 crore and ahead of estimates of Rs 9900 crore. Opex declined sequentially due to low business activity. Thus, operating profit (PPP) came in at Rs 18975 crore vs. estimate of Rs 15702 crore. Credit cost was higher due to elevated slippages while net profit was at Rs 6504 crore (up 55% YoY). Slippage rate was largely in line with private peers and guidance, 2-2.5% range, which is a positive considering current environment. The brokerage believes considering recovery gaining momentum from July 2021 onwards, the bank, by virtue of its strong liability franchisee, decent provisioning and levers to aid margins, should see improvement in overall operational performance. The brokerage values the bank at ~1.25x FY23E ABV and subsidiaries at ~Rs 180 per share to arrive at a revised TP of Rs 540 per share.
Promoter/FII Holdings
Promoters held 56.9 per cent stake in the company as of June 30, 2021, while FIIs held 11.4 per cent, DIIs 24 per cent and public and others 7.6 per cent.
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