Range
Stop Loss
Target
SBI (NSE Cash) - Buy
` 175 - `172
` 152
` 218
Monthly Chart
Technical Evidences
The entire PSU banking space has
undergone a massive corrective
phase in last 10 months. ‘SBI” too
corrected more than 40% from its
February 2015 high.
However, we are now observing a
strong ‘Multi-Year’ trend line support
around 165 - 170.
This support coincides with the 78.6%
Fibonacci retracement level of the
large up move from 167.59 to 331.76.
Thus, considering extreme oversold
condition of momentum oscillators,
we advise traders to buy this stock
from current level to a decline up to `
172 for a target of ` 218 in coming
three months.
Source: Falcon
( Chart time: IST 14.30)
January 21, 2016
Stock Info
SBI
SBI has been reporting stable numbers with respect to slippages and NPA ratios
Sector
Banking
over the past several quarters as compared to its peers. The bank’s Gross and
Net NPA numbers were 4.15% and 2.14% for 2QFY2016 as compared to 4.89%
Market cap
1,36,120
and 2.73% for the corresponding quarter of the previous year and 4.29% and
2.24% sequentially. Though there has been concerns about incremental
Beta
1.4
slippages, we believe that the current valuation adequately captures the risk
arising from those slippages.
52 week high/low
336/171
With expectation of improvement in economic growth in the medium term, asset
quality woes could reduce, which in turn could lead to further improvement in
return ratios. The bank’s core strength has been its high CASA and fee income,
Avg. Daily Volume
1,42,99,590
which has supported its core profitability in challenging times. Its strong capital
adequacy also provides comfort.
Face Value (`)
1
Among PSU banks, we continue to stick to the largest bank as it is a proxy to the
economy in the long term. In our view, the stock is currently trading at a decent
valuation of 0.7x FY2017E ABV (after adjusting `39/share towards value of
Shareholding Pattern (%)
subsidiaries) as compared to its peers.
Promoters
60.2
Company
Op. Inc NIM
PAT
EPS
ABV ROA ROE
P/E
P/ABV
Public
37.8
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FY2016E
82,520
2.7 14,954
20.0
183.9
0.7
11.5
9.8
1.1
Others
2.0
FY2017E
93,299
2.8 18,266
24.5
207.7
0.7
12.8
8.0
0.9
January 21, 2016
Research Team Tel: 022 - 3935 7800
E-mail:[email protected]
Website: www.angelbroking.com
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Disclosure of Interest Statement
SBI
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
January 21, 2015