Views on State Bank of India 2QFY2016 Results: Angel Broking

Views of Mr. Vaibhav Agrawal (VP Research - Banking, Angel Broking) on State Bank of India 2QFY2016 Results:

"State Bank of India reported 2QFY2016 results, which were above our as well as street expectations. Advances grew by 10.5% YoY, which resulted in NII growth of 7.4% YoY. Other income saw a jump of 35.6% YoY at INR 6,197cr resulting in an increase of operating income by 14.6% YoY. Asset quality shows signs of improvement with Gross as well as Net NPA ratio declining by 14bp and 10bp respectively at 4.15% and 2.14% respectively. Fresh slippages for the quarter came in at INR 5,875cr as against INR 7,318cr for Q1FY2016. Provisions came in at INR 4,361cr which grew marginally at 2% YoY. Overall, the PAT for the bank grew 25.1% YoY to INR 3,879cr led due to healthy performance on all fronts. SBI has been reporting stable numbers with respect to slippages and NPA ratios over the past several quarters as compared to its peers. The bank's core strength has been its high CASA and fee income, which has supported its core profitability in challenging times. Its strong capital adequacy also provides comfort. In our view, the stock is currently trading at a moderate valuation of 0.9x FY2017E ABV as compared to its peers. Hence we recommend a BUY rating on the stock."

Shares of STATE BANK OF INDIA was last trading in BSE at Rs.243.25 as compared to the previous close of Rs. 234.2. The total number of shares traded during the day was 3357717 in over 34122 trades.

The stock hit an intraday high of Rs. 244.7 and intraday low of 233.1. The net turnover during the day was Rs. 810552081.

Source : Equity Bulls

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