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Weak Provision Buffers a Dampener; Valuations Comforting Led by lower NII growth and higher provisions, SBI reported lower than

estimated PAT of Rs 35.8bn (~Rs 16.7bn ex-SBI Cards stake sale).

Higher agri slippages (Rs52bn) during Q4 impacted NII growth as the bank had to make interest reversal for 3 years against this portfolio(~Rs15bn).

While the bank made 15% provisions against Rs62bn of loans eligible for asset quality standstill (RBI requirement of 10% over Q4FY20 and Q1FY21), there were no excess COVID-related provision buffers created.

SBI has extended moratorium to all borrowers ex-NBFC where it is on a case-by-case basis. Agri loans excluded from moratorium. Borrowers paying less than two EMIs over Mar-May are considered to be under moratorium. About 16-18% of bank’s customers are under moratorium as of May-19.

Lower asset side risks may aid asset quality; Provisioning buffers weak While GNPAs improved by 80bps QoQ to 6.15% led by decline in slippages and elevated write-offs, slippages would have been higher at Rs140bn (2.5%) if not for the standstill benefit on overdue loans. Limited asset side risks for the bank led by lower CoF, high exposure to government employees & PSUs, and lower moratorium on corporate (7-8% by value) and unsecured loans (5% by number) is comforting. However, asset quality concerns remain given the bank’s high correlation to economy. Also, low standard provisioning buffers provides limited cushion for future losses.

CASA stable; Decline SA rates to aid CoF and NIM Sequential CASA growth at 5% remained above peers along with a slightly higher CASA ratio at 45.2% QoQ. The bank has lowered its savings rates by ~55bps since Jan-2020, which should support its NIM profile. Loan growth at 6% QoQ was better than expected driven by the bank’s domestic corporate book (9% QoQ) and overseas portfolio (11% QoQ).

Outlook and Valuation With limited earning cushion (PPoP/assets at 1.7%), weaker outlook on recovery/fee income, along with limited provision buffers, we don’t rule out likelihood of additional capital requirements. Nonetheless, valuations are comforting (standalone book trading at 0.5x FY22E ABV) led by bank’s formidable liability franchise and healthy subsidiaries. We maintain our BUY rating with a TP of Rs235 based on 0.7x FY22E ABV for standalone bank and the value of its subsidiaries, implying a FY22E P/ABV of 1.3x. Q4FY20 Result (Rs Mn)

Particulars Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%)

Net interest income 227,674 229,538 (0.8) 277,790 (18.0) Other income 133,461 126,851 5.2 91,059 46.6

Total Net Income 361,135 356,390 1.3 368,849 (2.1)

Operating expenses 203,793 187,059 8.9 186,622 9.2

Pre-provision profits 184,656 169,331 9.1 182,228 1.3

Provisions 134,951 165,019 (18.2) 72,529 86.1

Tax expense 13,892 (4,072) (441.2) 53,863 (74.2)

Reported Net Profit 35,813 8,384 327.2 55,836 (35.9)

(bps) (bps) Advances Growth (%) 6.4 13.0 (659.4) 7.4 (105.2)

NIM (%) 3.0 2.8 13 3.1 (8)

RoA (%) 0.4 0.1 28 0.6 (23)

RoE (%) 6.3 1.5 480 9.9 (353)

Gross NPA (%) 6.2 7.5 (138) 6.9 (79)

CMP Rs 188

Target / Upside Rs 235 / 25%

BSE Sensex 34,359

NSE Nifty 10,142

Scrip Details

Equity / FV Rs 8,925mn / Rs 1

Market Cap Rs 1,676bn

USD 22bn

52-week High/Low Rs 374/Rs 149

Avg. Volume (no) 75,437,600

NSE Symbol SBIN

Bloomberg Code SBIN IN

Shareholding Pattern Mar'20(%)

Promoters 57.6

MF/Banks/FIs 24.6

FIIs 9.6

Public / Others 8.2

Valuation (x)

FY20A FY21E FY22E

P/E 11.6 13.5 8.6

P/ABV 1.1 1.2 1.1

ROAA 0.4 0.3 0.4

ROAE 6.4 5.2 7.8

Estimates (Rs mn)

FY20A FY21E FY22E

NII 980,848 1,114,042 1,213,368

PPOP 619,170 689,349 738,288

PAT 207,038 124,095 194,960

Adj BV 174.6 161.4 177.0

VP Research: Mona Khetan Tel: +91 22 40969762

E-mail: monak@dolatcapital.com

Associate: Shreesh Chandra Tel: +91 22 40969714

E-mail: shreeshc@dolatcapital.com

State Bank of India

Buy

June 06, 2020

June 06, 2020 2

Other Important Highlights:

16% of customers are under moratorium as of May-end, of which 7% have paid at least 1 installment; while 9% have not paid any installment. While the moratorium share looks low, it not comparable with peers given their approach to arriving at the same.

Segment wise moratorium availed: (by number of customers)

o MSME – ~47% o Housing – ~20% o Unsecured loans – 5% o Corporate – ~13%; 7-8% by value; o NBFC – 5% by value or 16 by number o Working capital loans – 20% by value o Term loans – 23%

Under the MSME Credit Guarantee Scheme 0.8mn borrowers or Rs 1.5trn of portfolio is eligible for the scheme, translating to ~Rs 290bn (~20%) of additional lending opportunity. The bank has already extended such loans to ~10% customers by number (~30% by value)

Driven by high growth in corporate/international book, RWA/total assets increased by 180 bps during the quarter, resulting in a decline in CET1 ratio by 40 bps QoQ to 9.8%.

Risks to the View: Higher than expected impact on asset quality from COVID-19, weaker recoveries, any adverse impact of wage negotiations on opex, overhang of change in CEO.

Actual v/s estimates

(Rs mn) Actual Estimated % Variance Comments

NII 2,27,674 2,70,005 (15.7) High interest reversals from agri portfolio

Operating Profit 1,57,343 1,86,273 (15.5)

Other income benefitted from SBI cards IPO, though growth in core fee was subdued

PAT 35,813 77,590 (53.8)

Despite no COVID-related provisioning, high write-off and increase in PCR kept provisions elevated

Source: Company, DART

Change in estimates

Previous Revised Change %

Particulars (Rs bn) FY21E FY22E FY21E FY22E FY21E FY22E

Net Operating Revenue 15,34,169 16,47,772 14,95,639 16,14,024 (2.5) (2.0)

Pre-Provision Profits 7,21,842 7,60,524 6,89,349 7,38,288 (4.5) (2.9)

PAT 2,02,689 2,72,894 1,24,095 1,94,960 (38.8) (28.6)

Source: Company, DART

June 06, 2020 3

Elevated provisions led by high write-offs,

rise in PCR Lower NII, Core fee, and higher provisions

impacted profits

Source: Company, DART Source: Company, DART

CASA growth above peers despite reduction in rates

Deposits growth benefitted from flight to safety

Source: Company, DART Source: Company, DART

High sequential credit growth driven by domestic corporate and overseas book

Profit pressures could weaken capital position

Source: Company, DART Source: Company, DART

1.2

2.5

2.4

3.5

2.3

1.4

0.7

1.9

1.0

1.4

0.8

1.4

0.00.51.01.52.02.53.03.54.0

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

(%)

Provisions / Assets

0.3

0.2

0.1

(0

.9)

(0.6

)0

.1

0.5

0.1

0.3

0.3

0.6

0.4

-1.0

-0.5

0.0

0.5

1.0

(100,000)

(75,000)

(50,000)

(25,000)

0

25,000

50,000

75,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

(%)(Rs mn)

Reported Profits RoA (%)

40

.7

44

.9

45

.1

45

.7

45

.1

45

.3

45

.2

45

.7

45

.1

45

.1

44

.7

45

.2

38

40

42

44

46

48

0

5,000

10,000

15,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

(%)(Rs bn)

CASA Deposits CASA Ratio (%)

13

.3

10

.3

1.9

4.7

5.6

7.0

6.8

7.6

7.3

8.0

9.9

11

.3

0

5

10

15

0

10,000

20,000

30,000

40,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

(%)(Rs bn)

Global Deposits Growth (yoy %)

(3.5

)

(0.1

)

1.3

6.0

(3.1

)

4.3

4.6

6.7

(2.3

) 0.5

2.5

5.7

(4)

(2)

0

2

4

6

8

0

5,000

10,000

15,000

20,000

25,000

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

(%)(Rs bn)

Advances - Total Growth (qoq %)

10

.2

10

.4

9.8

9.9

9.8

9.7

9.6

9.6

9.6

10

.1

10

.2

9.8

9

10

10

11

1,600

1,700

1,800

1,900

2,000

2,100

Q1

FY1

8

Q2

FY1

8

Q3

FY1

8

Q4

FY1

8

Q1

FY1

9

Q2

FY1

9

Q3

FY1

9

Q4

FY1

9

Q1

FY2

0

Q2

FY2

0

Q3

FY2

0

Q4

FY2

0

(%)(Rs bn)

CET1 Capital CET1 (%)

June 06, 2020 4

SBI’s SOTP Valuation

Entity Stake Per Share Value Methodology

Standalone B (A) 100% 124 P/ABV

Lending Business

SBI Card 70% 46 Net Worth

Insurance Business

SBI Life Insurance 58% 56 EV

SBI General Insurance 70% 9 P/E

Capital Market

SBI Funds Management 57% 19 % of AUM

Value of Subsidiaries (B) 111

Holdco. Discount 15%

Value of the bank (A+B) 235

Contribution of subs to total (%) 40.2

Source: Company, DART

June 06, 2020 5

Quarterly Financials

Profit and Loss (Rs mn) Q4FY20 Q4FY19 % yoy / bps Q3FY20 % qoq / bps

Interest Inc. 6,26,814 6,29,854 (0.5) 6,76,920 (7.4)

Yield on Advances (%) 8.7 8.5 23 8.9 (19)

Interest Expenses 3,99,145 4,00,316 (0.3) 3,99,132 0.0

Cost of Dep. (%) 4.9 5.1 (16) 5.0 (3)

Net Interest Income 2,27,674 2,29,538 (0.8) 2,77,790 (18.0)

NII to Net Operative Income 63.0 64.4 (136) 75.3 (1,227)

NIM (%) 3.0 2.8 13 3.1 (8)

Dom. NIM (%) 3.2 3.0 17 3.3 (8)

Int. NIM (%) 1.2 1.1 6 1.2 (2)

Core Fee Income 78,730 85,890 (8.3) 56,350 39.7

Forex Income 6,910 6,710 3.0 6,350 8.8

Profit on Sale / Rev of Investments 5,057 5,340 (5.3) 6,960 (27.3)

Recovery in w/o accounts 39,410 24,850 58.6 20,870 88.8

Misc. Other Income 3,360 4,070 (17.4) 530 534.0

Non Core Other Income 54,737 40,961 33.6 34,710 57.7

Other Income - Total 1,33,461 1,26,851 5.2 91,059 46.6

Other Inc to Net Oper. Income (%) 37.0 35.6 136 24.7 1,227

Net Operating Revenue 3,61,135 3,56,390 1.3 3,68,849 (2.1)

Employee Expenses 1,20,387 1,04,780 14.9 1,14,556 5.1

Empl. Cost/Oper. Exps. (%) 33.3 29.4 394 31.1 228

Other Opex 83,406 82,279 1.4 72,065 15.7

Other Opex/ Assets (%) 0.2 0.2 (1) 0.2 2

Total Opex 2,03,793 1,87,059 8.9 1,86,622 9.2

Cost to Income Ratio (%) 56.4 52.5 394 50.6 584

Pre Provision Profits 1,57,343 1,69,331 (7.1) 1,82,228 (13.7)

Exceptional Profit (Loss) 27,313 - - - -

PPP ex Except. Items 1,84,656 1,69,331 9.1 1,82,228 1.3

Provision towards NPAs 1,18,937 1,73,360 (31.4) 81,931 45.2

Standard Assets Provision 18,660 8,100 130.4 (17,520) (206.5)

Provision for investments (6,040) (16,150) (62.6) 32,870 (118.4)

Other Provisions 3,390 (290) (1,269.0) (24,750) (113.7)

Provisions & Contingencies - Total 1,34,951 1,65,019 (18.2) 72,529 86.1

NPA Provisions as % PPP 73.1 97.5 (2,437) 39.8 3,328

Profit Before Tax 49,705 4,312 1,052.7 1,09,699 (54.7)

Tax 13,892 (4,072) (441.2) 53,863 (74.2)

Effective Tax Rate (%) 27.9 (94.4) 12,238 49.1 (2,115.2)

Reported Profits 35,813 8,384 327.2 55,836 (35.9)

RoA (%) 0.4 0.1 28 0.6 (23.0)

Basic EPS (Rs) 4.0 1.0 313.4 6.3 (35.9)

June 06, 2020 6

Balance Sheet Analysis Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 QoQ % / bps

YoY % / bps

Net Worth 22,09,138 22,25,578 22,60,753 23,25,207 23,20,074 (0.2) 5.0

CET1 (%) 9.6 9.6 10.1 10.2 9.8 (41) 15

Tier 1 (%) 10.7 10.7 11.3 11.6 11.0 (59) 35

Total CAR (%) 12.7 12.9 13.6 13.7 13.1 (67) 34

RWA - Total 1,99,27,781 1,94,93,227 2,03,43,021 1,92,59,600 2,09,89,805 9.0 5.3

Advances - Total 2,18,58,769 2,13,47,737 2,14,61,598 2,19,99,169 2,32,52,896 5.7 6.4

Investments 96,70,220 94,43,548 98,50,222 1,01,21,007 1,04,69,545 3.4 8.3

Total Assets 3,68,09,143 3,58,19,969 3,67,80,006 3,74,91,922 3,95,13,939 5.4 7.3

RoA (%) 0.09 0.25 0.33 0.60 0.37 (23) 28

Deposits 2,91,13,860 2,94,88,207 3,03,33,958 3,11,12,286 3,24,16,207 4.2 11.3

Saving Deposit 1,08,51,510 1,10,35,370 1,13,08,220 1,15,17,010 1,19,35,660 3.6 10.0

Current Deposit 20,21,340 18,08,640 19,53,490 18,91,290 21,74,150 15.0 7.6

CASA Deposits 1,28,72,850 1,28,44,010 1,32,61,710 1,34,08,300 1,41,09,810 5.2 9.6

CASA Ratio (%) 45.7 45.1 45.1 44.7 45.2 44 (58)

Dom. Term Deposits 1,52,69,580 1,56,62,277 1,61,25,838 1,65,73,670 1,71,36,350 3.4 12.2

Interest Bearing Liabilities - Total

3,31,44,031 3,23,21,331 3,30,75,816 3,37,37,772 3,55,62,764 5.4 7.3

Source: Company, DART

Movement of NPA (Rs mn) Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 QoQ % /

bps YoY % /

bps

Gross Advances 2,35,67,580 2,23,76,353 2,24,80,675 2,30,05,935 2,42,42,577 5.4 2.9

Gross NPA 17,27,504 16,84,939 16,16,361 15,96,612 14,90,919 (6.6) (13.7)

Gross NPA Ratio (%) 7.53 7.53 7.19 6.94 6.15 (79) (138)

PCR - Calculated (%) 62.1 61.1 62.9 63.5 65.2 169 312

PCR - Inc. Tech w/o (%) 78.73 79.34 81.23 81.73 83.62 189 489

Net Advances 2,17,59,050 2,13,75,850 2,14,83,591 2,19,80,608 2,32,60,673 5.8 6.9

Net NPA 6,54,947 6,56,239 5,99,392 5,82,486 5,18,713 (10.9) (20.8)

Net NPAs Ratio (%) 3.01 3.07 2.79 2.65 2.23 (42) (78)

Loan Book Analysis (Rs mn) Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 QoQ % /

bps YoY % /

bps

Home Loans 40,03,770 41,13,600 42,44,870 44,04,480 45,58,650 3.5 13.9

Auto Loans 7,18,840 7,17,270 7,07,260 7,34,620 7,26,620 (1.1) 1.1

Other Per Segment Loans

17,55,830 18,04,720 19,03,570 20,58,560 21,90,620 6.4 24.8

Personal Loan 64,78,440 66,35,590 68,55,700 71,97,660 74,75,890 3.9 15.4

Agriculture 20,26,810 20,10,540 20,24,620 20,99,970 20,60,670 (1.9) 1.7

Domestic Corporate 85,16,380 78,26,030 76,59,860 77,10,000 84,42,150 9.5 (0.9)

MSME 28,85,830 28,12,230 27,41,410 27,80,350 26,76,140 (3.7) (7.3)

Total Domestic Adv. 1,99,07,460 1,92,84,390 1,92,81,580 1,97,87,990 2,06,54,840 4.4 3.8

Foreign Offices 30,27,080 30,98,540 32,01,550 32,28,700 35,73,600 10.7 18.1

Loan Book 2,18,58,770 2,13,47,737 2,14,61,598 2,19,99,169 2,32,52,896 5.7 6.4

Investments 96,70,220 94,43,548 98,50,222 1,01,21,007 1,04,69,545 3.4 8.3

Total Assets 3,68,09,143 3,58,19,969 3,67,80,006 3,74,91,922 3,95,13,939 5.4 7.3

Source: Company, DART

June 06, 2020 7

Conference Call Highlights

Deposits market share improved during the year. The bank expects deposit growth to slow down going forward.

While the rate of withdrawals had come down during the lockdown, it is expected to rise once customers start spending their balances.

Weaker NII growth was led by higher agri slippages at Rs 5k crs where the bank had to make int reversal for 3 years (~Rs 1500crs)

Higher slippages guided during the year were due to three outliers: one HFC account (DHFL), one power sector company – due to failed restructuring, and elevated Agri NPAs. Slippages, excluding the above, have been stable in all segments.

Performance Outlook and Expectations:

In the base case scenario, the bank should be able to repeat March’20 performance on slippages and profits could improve.

Improvement is expected to flow from: Chunky recoveries on 100% provided accounts; Value unlocking in various subsidiaries; Lower slippages;

Cost rationalization; to be achieved via: ­ reduction and redeployment of ~20% of staff in admin/back

offices due to implementation of digital initiatives.

­ Tighter control on overhead costs

­ Reduction in legal and other related costs

However, other income especially fees and forex are expected to be impacted. Recoveries from resolutions are also expected to face delays;

NII growth (to >Rs 1trn in FY21) and stable NIMs are will be key PPoP driver.

PPoP is expected to be ~Rs 680bn in FY21.

Agri reforms will also help bank grow and improve quality of the portfolio.

Moratorium:

Given to all customers except NBFCs where it is on a case by case basis. Agri loans excluded from moratorium.

Moratorium numbers based on customers who have paid less than 2 EMIs in 3 months

83% of customers have paid at least 2 EMIs, while 16% of customers are under moratorium as of May-end, of which:

o 7% have paid at least 1 installment; while 9% have not paid any installment.

Segment wise moratorium availed: (by number of customers)

o MSME – ~47% o Housing – ~20% (of 38 lakh total HL customers) o Unsecured loans – 5% o Corporate – ~13%; 7-8% by value; o NBFC – 5% by value or 16 by number o Working capital loans – 20% by value o Term loans – 23% of customers have availed moratorium.

June 06, 2020 8

Of the 94 lakh term loan accounts – 9 lakh customers have not paid any

installment, 7 lakh customers have paid one installment, while others have paid 2 or more installments

MSME Credit Guarantee Scheme:

8 lakh borrowers; and Rs 1.5 lakh crs of portfolio eligible for the scheme, translating to 29kcrs (~20%) of additional lending opportunity.

The bank has already extended such loans to ~10% customers by number (~30% by value).

NBFC lending:

o 15 proposals worth ~15-18K crs under pipeline for lending (both as investment and loans) of which ~15% has already been sanctioned.

o Under the two TLTRO windows, the bank has disbursed Rs 1000crs, with an additional Rs 2000 crs in pipeline

The bank’s CRE exposure is in the form of LRD to large funds operating in India. Owners as well as tenants of such properties are of very high quality

The bank should not require additional capital at the moment; profits and earnings via value unlocking in subsidiaries (2.11% of SBI life stake remains to be sold)

The bank has provided Rs 3000 crs @ 10% on wage revision.

June 06, 2020 9

Profit and Loss Account (Rs Mn)

Particulars FY19A FY20A FY21E FY22E

Interest Income 2,428,687 2,573,236 2,716,999 2,959,920

Interest expenses 1,545,198 1,592,388 1,602,956 1,746,552

Net interest income 883,489 980,848 1,114,042 1,213,368

Other incomes 352,143 390,058 381,596 400,656

Total expenses 696,877 751,737 806,289 875,736

- Employee cost 410,547 457,150 502,865 563,208

- Other 286,330 294,587 303,425 312,528

Pre provisioning profit 538,755 619,170 689,349 738,288

Provisions 538,286 430,699 523,513 477,750

Profit before taxes 16,075 250,628 165,836 260,538

Tax provision 7,452 105,747 41,741 65,577

Profit after tax 8,623 144,881 124,095 194,960

Adjusted profit 24,228 207,038 124,095 194,960

Balance Sheet (Rs Mn)

Particulars FY19A FY20A FY21E FY22E

Sources of Funds

Equity Capital 8,925 8,925 8,925 8,925

Reserves & Surplus 2,200,213 2,311,150 2,410,460 2,583,177

Minority Interest 0 0 0 0

Net worth 2,209,138 2,320,074 2,419,385 2,592,101

Borrowings 4,030,171 3,146,557 3,540,449 4,071,460

- Deposits 29,113,860 32,416,207 33,727,437 36,643,140

- Other interest bearing liabilities 0 0 0 0

Current liabilities & provisions 1,455,973 1,631,101 1,756,844 1,936,301

Total Liabilities 36,809,142 39,513,939 41,444,115 45,243,002

Application of Funds

Cash and balances with RBI 2,224,901 2,510,970 2,483,087 2,710,850

Investments 9,670,219 10,469,545 11,057,130 11,869,341

Advances 21,858,769 23,252,896 24,415,540 26,857,094

Fixed assets 398,862 384,393 389,493 396,965

Other current assets, loans and advances 2,663,277 2,896,136 3,098,865 3,408,751

Total Assets 36,816,029 39,513,939 41,444,115 45,243,002

E – Estimates

June 06, 2020 10

Important Ratios

Particulars FY19A FY20A FY21E FY22E

(A) Margins (%)

Yield on advances 7.8 8.0 8.0 8.1

Yields on interest earning assets 7.4 7.4 7.3 7.5

Yield on investments 7.3 6.8 6.6 6.8

Costs of funds 4.8 4.6 4.5 4.6

Cost of deposits 5.0 4.8 4.5 4.6

NIMs 2.7 2.8 3.0 3.1

(B) Asset quality and capital ratios (%)

GNPA 7.5 6.2 7.2 7.0

NNPA 3.0 2.2 3.0 2.8

PCR 62.1 65.2 60.0 61.0

Slippages 2.1 2.5 4.0 3.2

NNPA to NW 33.4 24.9 33.5 32.4

CASA 46.1 45.2 46.0 46.0

CAR 12.7 13.1 12.5 12.1

Tier 1 10.7 11.0 10.7 10.6

Credit - Deposit 75.1 71.7 72.4 73.3

(C) Dupont as a percentage of average assets

Interest income 6.8 6.7 6.7 6.8

Interest expenses 4.3 4.2 4.0 4.0

Net interest income 2.5 2.6 2.8 2.8

Non interest Income 1.0 1.0 0.9 0.9

Total expenses 2.0 2.0 2.0 2.0

- cost to income 56.4 54.8 53.9 54.3

Provisions 1.5 1.1 1.3 1.1

Tax 0.0 0.3 0.1 0.2

RoA 0.0 0.4 0.3 0.4

Leverage 18.8 19.0 19.0 19.3

RoE 0.4 6.4 5.2 7.8

RoRwa 0.0 0.7 0.6 0.8

(D) Measures of Investments

EPS - adjusted 1.0 16.2 13.9 21.8

BV 219.9 233.3 244.1 262.9

ABV 144.8 174.6 161.4 177.0

(E) Growth Ratios (%)

Net interest income 18.0 11.0 13.6 8.9

PPoP (0.4) 14.9 11.3 7.1

Adj PAT (318.0) 754.5 (40.1) 57.1

Advances 13.0 6.4 5.0 10.0

Total borrowings 11.3 (21.9) 12.5 15.0

Total assets 6.6 7.3 4.9 9.2

(F) Valuation Ratios

Market Cap (Rs. mn) 1,676,038 1,676,038 1,676,038 1,676,038

CMP (Rs.) 188 188 188 188

P/E (x) 194.4 11.6 13.5 8.6

P/BV (x) 0.9 0.8 0.8 0.7

P/ABV (x) 1.3 1.1 1.2 1.1

E – Estimates

DART RATING MATRIX

Total Return Expectation (12 Months)

Buy > 20%

Accumulate 10 to 20%

Reduce 0 to 10%

Sell < 0%

Rating and Target Price History

Month Rating TP (Rs.) Price (Rs.)

Feb-19 Accumulate 320 284

May-19 Accumulate 350 307

Aug-19 Accumulate 370 308

Oct-19 Accumulate 315 282

Nov-19 Accumulate 365 336

Jan-20 Accumulate 365 318

Mar-20# Buy 250 183

*Price as on recommendation date # Change the Analyst

DART Team

Purvag Shah Managing Director purvag@dolatcapital.com +9122 4096 9747

Amit Khurana, CFA Head of Equities amit@dolatcapital.com +9122 4096 9745

CONTACT DETAILS

Equity Sales Designation E-mail Direct Lines

Dinesh Bajaj VP - Equity Sales dineshb@dolatcapital.com +9122 4096 9709

Kapil Yadav VP - Equity Sales kapil@dolatcapital.com +9122 4096 9735

Yomika Agarwal VP - Equity Sales yomika@dolatcapital.com +9122 4096 9772

Jubbin Shah VP - Derivatives Sales jubbins@dolatcapital.com +9122 4096 9779

Ashwani Kandoi AVP - Equity Sales ashwanik@dolatcapital.com +9122 4096 9725

Lekha Nahar Manager - Equity Sales lekhan@dolatcapital.com +9122 4096 9740

Equity Trading Designation E-mail

P. Sridhar SVP and Head of Sales Trading sridhar@dolatcapital.com +9122 4096 9728

Chandrakant Ware VP - Sales Trading chandrakant@dolatcapital.com +9122 4096 9707

Shirish Thakkar VP - Head Domestic Derivatives Sales Trading shirisht@dolatcapital.com +9122 4096 9702

Kartik Mehta Asia Head Derivatives kartikm@dolatcapital.com +9122 4096 9715

Dinesh Mehta Co- Head Asia Derivatives dinesh.mehta@dolatcapital.com +9122 4096 9765

Bhavin Mehta VP - Derivatives Strategist bhavinm@dolatcapital.com +9122 4096 9705

140

190

240

290

340

390

Dec-1

8

Jan-1

9

Fe

b-1

9

Mar-

19

Apr-

19

May-1

9

Jun-1

9

Jul-19

Aug-1

9

Sep-1

9

Oct-

19

Nov-1

9

Dec-1

9

Jan-2

0

Fe

b-2

0

Mar-

20

Apr-

20

May-2

0

Jun-2

0

(Rs) SBIN Target Price

Dolat Capital Market Private Limited. Sunshine Tower, 28th Floor, Senapati Bapat Marg, Dadar (West), Mumbai 400013

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