Motilal Oswal has buy call on

with a target price of Rs 530. The current market price of State Bank of India is Rs 431.65. Time period given by analyst is year when State Bank of India price can reach defined target.
State Bank of India, incorporated in the year 1955, is a banking company (having a market cap of Rs 381259.40 Crore).

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 103430.64 Crore, up 6.43 % from last quarter Total Income of Rs 97182.15 Crore and up 9.78 % from last year same quarter Total Income of Rs 94218.82 Crore. The bank reported net profit after tax of Rs 6125.52 Crore in latest quarter.

Investment Rationale
The bank has reported a strong FY21 in a challenging environment. Deposit growth stood strong, led by healthy CASA trends, while loan growth is likely to recover gradually over FY22–23E. The asset quality outlook remains encouraging, with the slippage ratio lower than many private banks. SBIN has prudently improved PCR to ~71% and holds unutilized COVID provisions of ~INR63b. SBIN has reported FY21 RoE of ~9.5% – the highest since the AQR was commenced in FY16 – and now aims to reclaim 15% RoE in the medium term. Thus, the brokerage projects RoA/RoE of 0.8%/15% by FY23E and reiterate SBIN as top BUY, with TP of INR530 (1.1x FY23E ABV + INR188 from subs)

Promoter/FII Holdings
Promoters held 56.9 per cent stake in the company as of March 31, 2021, while FIIs held 11.1 per cent, DIIs 24.3 per cent and public and others 7.7 per cent.


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