INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Shares of State Bank of India (SBI) weakened over 3 per cent on Monday on a disappointing set of June quarter results.
The
numbers came out on Friday
The bank registered a profit of Rs 2,005 crore in the same period a year before.
Analysts in an ETNow poll had projected a profit of Rs 242
crore.
The PSU bank had reported a loss of Rs 7,718 crore in January-March
In the December quarter of 2017-18, it had reported a loss of Rs 2,416.40 crore, its first ever
For April-June, the bank reported provisions and contingencies of Rs 19,228 crore compared with Rs 28,096 crore in the March quarter and Rs
8,929.48 crore in the year-ago quarter.
Brokerages are mixed on the stock, post their shock loss.
Macquarie has maintained 'Neutral' rating
on the stock with a target price of Rs 281
It said the bank has reported a loss in Q1 FY19, but the hope of turnaround refuses to die
Large slippages outside the watchlist and weak loan growth are the key negatives for the stock
Sanctity of stressed asset guidance is a big questionmark, the brokerage noted
SBI's key positive was an improvement in the provision coverage ratio, it added
Deutsche Bank has maintained 'Buy' rating and raised the target price to Rs 365 from Rs 330 earlier
The brokerage finds slippages are still elevated, but strong recoveries have aided NPL reduction
It expects earnings recovery from Q2
Motilal Oswal stated, "Credit cycle is clearly showing recovery signs, as evident in the declining size of watch-list (2 per cent of loans
including non-fund) and the lower slippages from the core corporate pool." It expects slippages to further moderate in Q2 FY19
per cent/13.7 per cent by FY20," it added
It has maintained 'buy' with an unchanged target price of Rs 360
