Buy State Bank of India, target price Rs 673: ICICI Securities

ICICI Securities has buy call on State Bank of India with a target price of Rs 673. The current market price of State Bank of India is Rs 446.4. Time period given by analyst is one 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 412138.56 Crore).

State Bank of India key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 108034.68 Crore, up 3.35 % from last quarter Total Income of Rs 104528.22 Crore and up 4.45 % from last year same quarter Total Income of Rs 103430.64 Crore. The bank reported net profit after tax of Rs 9549.13 Crore in latest quarter.


Investment Rationale
SBI exited FY22 with 13.9% RoE and 0.67% RoA aided by growth build-up, GNPAs at a decadal low, slippages at <1%, credit cost at 55bps and steady margin profile. Improved visibility on asset quality with ‘new normal’ credit cost of 1%, credit growth of 13%/15% for FY23E/FY24E, asset resolution and stable NIMs will drive RoE to >16% by FY23E/FY24E and valuations to 1.5x Sep’23E book. It maintains BUY with an unchanged target price of Rs673.

Promoter/FII Holdings
Promoters held 57.59 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.97 per cent, DIIs 24.65 per cent.