SBI rises 2% after Morgan Stanley raises its target price

Shares of SBI rose nearly 2 per cent in the afternoon trade on Thursday after Morgan Stanley raised its target price for the stock to Rs 375 from Rs 350 while maintaining "overweight" rating.

The firm said it sees a turnaround in profit from FY20 and will see a significant drop in provisions in second half of FY19.

Morgan Stanley further said that it expected credit costs to drop to less than 100 bps in FY20 and an improvement in NIM (net interest margin) over the next 2 years driven by continued control on funding costs and lower non-interest earning assets.


Morgan Stanly also expects expenses to grow in single digits as some one-off provisions (for retirement benefits) run off while cost income ratio is likely to decline to 51 per cent in FY20 from 56 per cent in FY19

The scrip was 1.95 per cent up at Rs 290.80 at around 12.57 pm while the benchmark BSE Sensex rose 0.56 per cent to 35,980.55. It opened at Rs 289.60 on the BSE against its previous closing of Rs 285.25.