Buy State Bank of India; target of Rs 1200: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • SBI's core PPoP was in-line, driven by better NIM, which improved 8bps QoQ to 2.94%.
  • Loan growth was mainly led by retail and agri segments, with management confident of achieving 14-15% credit growth for FY27.
  • NIM could be higher than guidance, supported by full impact of loan repricing and MCLR repricing, while CoF may be limited due to excess SLR.

Thesis Validation Checklist

  • Watch for signals such as loan growth, NIM expansion, and asset quality trends to validate the thesis.
  • Monitor management's ability to achieve credit growth guidance and maintain NIM.
  • Keep an eye on the impact of interest rate changes on SBI's margins and asset quality.
  • Observe the bank's ability to manage its balance sheet and maintain a healthy CASA ratio.