Axis Capital maintains ‘buy’ on SBI, raises target price to Rs 400

Axis Capital has maintained its ‘buy’ rating on SBI in long term and raised their target price to Rs 400 from Rs 375. Shares of SBI ended flat at Rs 335.4 on Tuesday while the BSE Sensex closed 67.93 points down at 40,821.30.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated interest income of Rs 46575.64 crore, up 3.09% from last quarter interest income of Rs 45177.78 crore and up 17.98% from last year same quarter interest income of Rs 39475.93 crore. The bank has reported net profit after tax of Rs 3645.83 crore in the latest quarter.


Investment Rationale

The brokerage cited improvement in bank’s RoAs/ RoEs with receding fears of NPL. The brokerage sees few tailwinds emerging for SBI in the medium term such as receded NPL concern, strong traction in subsidiary businesses and valuations, which now account for 40% of SBI’s value and steady core business with better NIM.