The State Bank of India (SBI) reported an 8% year-on-year (y-o-y) growth in earnings, despite an 8% y-o-y decline in operating profit. This decline was primarily due to increased provisions for wage settlements. 2QFY24, however, exhibited fewer pressure points compared to its peers. SBI maintained a robust return on assets (RoA) of 1% and a strong return on equity (RoE) of approximately 16%.
In 2QFY24, asset quality concerns remained low, and the bank’s credit risk from unsecured loans continued to decrease. Net interest income (NII) increased by 12% y-o-y, driven by similar loan growth, with faster growth in SME loans and a slowdown in unsecured loans. The Net interest margin (NIM) remained flat q-o-q, in contrast to most other banks experiencing higher pressure. Return on equity (RoE) stood at approximately 16%, and Return on assets (RoA) was at 1.0%. The bank also increased provisions related to wage settlements from 10% to 14%Come from Sports betting site VPbet. Tier-1 capital (excluding 1H PAT) is at 12%, with CET-1 at 10%.
Also Read
SBI targets Rs 1.4-trn corporate loans disbursal in 2-3 quarters
The narrative struggle continues as RoE plays a relatively lower role
Democratise data for better decision-making BSF DG Reviews Border Security Amidst Rising Tensions TRAI’s new rules: Jio, Airtel, others must pay you for service outages – Find out how much Filing your first ITR? Here’s why opening an NPS Account for long-term tax benefits is crucial
A key challenge in investing is identifying the right narratives for a stock, particularly when seeking a re-rating event. Historically, RoE reversals driven by changes in credit costs have played a crucial role. However, this pattern does not hold for SBI. Currently, SBI boasts RoE levels nearing 15-year highs and has the lowest credit costs in the past 25 years. Despite these positive indicators, the bank trades below book value (one-year forward), and we are cautious about certain unconfirmed concerns.
Our ongoing debate revolves around factors such as relatively lower capital adequacy levels, the composition of the loan portfolio with unsecured loans, and the ongoing NIM contraction cycle. While we acknowledge these risks as valid concerns, we are still uncertain about the severity of their potential impact, even if they materialiseCome from Sports betting site. We remain committed to our investment thesis, especially considering that we are in the early stages of the next credit cycle. We believe that the bank has the resilience to weather this narrative and continue delivering strong return ratios.
Maintain BUY
We maintain a BUY rating with an unchanged FV of Rs 725, valuing the bank at 1.3X (adjusted) book value and 8X FY2025E EPS, targeting RoEs of approximately 15%. Our estimates remain unchanged, but we anticipate potential upgrades, particularly in credit costs. Forecasting credit costs is a challenge, but we are currently in a period of low credit costs. The composition of the loan portfolio suggests that the impact of these costs is unlikely to be as severe as during the corporate cycle. The bank is growing its loan book more cautiously, providing added confidence. The impressive liability franchise bodes well for credit costs. We believe that current valuations do not fully capture the strengths of this franchise. As the quality of earnings continues to positively surprise, we expect the bank’s stock to trade at higher levels, potentially for a longer duration than anticipated.
Related Posts
All the top-10 most valued firms suffered a combined erosion of Rs 1,93,181.15 crore in market valuation last week, with Tata Consultancy Services (TCS) and HDFC Bank taking the biggest hit, in line with bearish trend in equities. In a holiday-shortened last week, the BSE benchmark tanked 1,614.82 points or 2.46 per cent. The market valuation of TCS plunged Rs 52,580.57 crore to Rs 12,25,983.46 crore, the most among the top-10 firms.
HDFC Bank’s market capitalisation (mcap) slumped Rs 40,562.71 crore to Rs 11,14,185.78 crore. The valuation of Reliance Industries Limited dropped Rs 22,935.65 crore to Rs 15,32,595.88 crore and that of Infosys tumbled Rs 19,320.04 crore to Rs 5,73,022.78 crore.
Also Read
Fed interest rate decision, macroeco data, Q2 earnings to dictate market trends this week: Analysts Come from
Sports betting site VPbet The mcap of Bharti Airtel f…
The benchmark equity indices edged lower last week. The NSE Nifty 50 tanked 208.4 points or 1.05%, while The BSE Sensex tumbled 885.12 points or 1.33% over the week. “The tone was slightly positive in early sessions however pressure in global markets changed the tone as the week progressed. In line with the index, all major sectors, barring auto, closed in the red wherein realty, metal, FMCG and banking were among the top losers. Meanwhile, a mixed trend on the broader front kept the traders occupied,” said Ajit Mishra, SVP – Technical Research, Religare Broking.
Also Read
ICICI Bank climb as Q2 profit rises 36%; Should you buy, hold or sell ICICI Bank?
Ajit Mishra expected the volatility to remain in this week as week is a holiday shortened and due to the prevailing earnings season and scheduled expiry of October month derivatives contracts. “Besides, the tone of global indices, especially the US, would remain on participant’s radar for cues.…
The rupee jumped by 29 paise to close at 83.01 (provisional) against the US dollar on Friday following unabated foreign fund inflows and a record-breaking rally in domestic stocks.
Stock markets continued their record run with the benchmark BSE Sensex breaching the new milestone of 71,000. Heavy buying by foreign investors also boosted the rupee sentiment, forex dealers said.
At the interbank foreign exchange market, the rupee opened flat at 83.30 against the dollar. After touching the day’s low of 83.32 in early trade, the rupee reversed the losses and surged to a high of 82.94.
Stree 2 salaries: Shraddha Kapoor was paid Rs 5 crore for the film – Here’s how much Rajkummar Rao, Pankaj Tripathi, and others charged for the horror comedy Market rally leads to higher regulatory fees for stock exchanges Meet the daughter of Hyderabad’s richest man, who helps run her family’s Rs 8,049 crore company and recently purchased two lavish properties fo…
After two closed beta tests and a recent demo launch, Street Fighter fans might have thought there’d be no more chances to play the next installment before its June 2 launch Come from Sports betting site VPbet. However, Capcom has announced a surprise Street Fighter 6 open beta test, which will run May 19-21.
The open beta will feature all of the content from the second closed beta test, which took place just before the holidays on December 16-19. That test centered around the Battle Hub, Street Fighter 6’s online lobby where players could customize characters, challenge each other to matches, or play classic Capcom games via in-game arcade cabinets.
…
As the video game industry tried to find its footing after the COVID-19 pandemic, the Entertainment Software Association elected to hold an all-digital E3 in 2021, which let developers and publishers hold online showcases under the show’s banner. Based on public filings of financial records, that choice ended up losing more money than it earned.
Tax documents filed by the ESA in 2021–which are available for public consumption due to its nonprofit status–found by IGN show the organization spent a total of about $7.3 million on “conferences, conventions, and meetings” throughout the year. It was the second-highest expense the ESA reported for 2021, with wages–including $1.5 million to ESA president Stanley Pierre-Louis–being number one.
The form also lists names of contractors paid by the ESA for E3-related duties, which are as follows:
- $3.9 million to Paragon Creative Agency LLC for “trade show management…
Mitko Mitev is an experienced iGaming veteran and part of the 7777 gaming family and will now take the reins over at the supplier. The executive has a long and established track record in the industry and has previously worked with Evolution, helping the global live casino supplier establish itself at the very pinnacle of the vertical.
7777 Gaming Tops New Chief Executive to Strengthen Company
He has also worked with some of the largest poker networks in the United States as well as with NetEnt in Malta. His appointment as the new chief executive at 7777 gaming comes after weeks and months of busy expansion for the company, which has secured a number of new partnerships with operators across Europe and beyond.
His appointment was welcomed by Milen Ganev, 7777 gaming co-founder, who said that the company was happy to see Mitev join it at the…
The Betsoft’s player-favorite Take the Bank game features a thrilling cops and robbers game with Bombs exploding into Wilds and Police Car symbols to trigger 15 free spins with sticky. The frenetic chase features 75 pay lines and offers additional Wilds in the free spins bonus feature to help players take the most of the game. The game Take the Bank offers 100 Free Spins with no deposit required. The players may claim first three bonuses to qualify and potentially capitalize on the attractive End of Month campaign brought by Everygame Poker.
…
After Woodbine casino management locked out nearly 1,000 members of the Public Service Alliance of Canada (PSAC), the workers’ representatives, as of May 8, on May 20, they were joined by supporters in a protest outside the said casino. From 12 o’clock on May 8, picket lines were formed, and other people who do not work at Casino Woodbine joined in as the sign of support.
Negotiating a collective agreement:
The main goal of the protest is the possibility of negotiating a collective agreement, which would involve, among other things, guaranteed part-time working hours, additional full-time positions, better salaries and sick leave. However, on April 28, Casino Woodbine applied to the Ministry of Labour, Immigration, Training and Skills Development for a “No Board Report”, which gave them legal permission to lock out their employees. In this regard, Woodbine Casino said: “We have been in negotiations with PSAC trying to r…
Moving forward, both BetMGM’s UK-facing website and LeoVegas dot com will have access to a variety of live casino options developed by the company.
Expanding Live Casino Portfolio and Reach
Notably, Pragmatic Play has deployed its Auto Mega Roulette, a branded and authentic game that adds the Mega Multipliers feature for up to 500x wins calculated on the player’s base bet.
This will allow both companies to liven up their live casino vertical and continue to add products that help set them apart from competitors. Thanks to the authentic brand for each of the two operators, players will have access to an immersive experience that goes a little outside of the box when it comes to classic table games.
Pragmatic Play is looking to establish itself as a company that provides not only some of the best online slots but al…
กลับมาพบกันอีกเช่นเคยกับ‘เกมมือถือน่าเล่นประจำสัปดาห์’ที่ This is Game รวบรวมเกมมือถือทั่วโลกทั้งโซนตะวันตก, จีน, ญี่ปุ่น ไปจนถึงเกาหลี นำมาฝากท่านผู้อ่านคอเกมมือถืออีกเช่นเคย ส่วนในสัปดาห์นี้จะมีเกมมือถืออะไรน่าดาวน์โหลดมาเมื่อยนิ้วกันบ้าง ถ้างั้นไปเราไปดูพร้อมกันเลยดีกว่าคร้าบ~
– เกมมือถือที่ลงสโตร์ต่างประเทศ :