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SBI set for next leg of re-rating

SBI set for next leg of re-rating
August 05
10:56 2021

While receding asset quality woes led to valuation re-rating so far, the strong earnings aided by the economic recovery will drive the future stock performance

August 05, 2021 / 10:16 AM IST

SBI set for next leg of re-rating

PRO Only Highlights
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Quarterly performance largely backed by improved realisations
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Medium-term triggers China plus and protectionist measures for tyre industry
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Valuations not inexpensive; but improved medium-term outlook

State Bank of India (SBI) (CMP: Rs 457; MCAP: Rs 4,07,899 crore) has posted a strong show with net profit rising to Rs 6,045 crore in the first quarter of FY22, a growth of 55 per cent year on year (YoY). The bank reported its highest ever quarterly profit amid the second wave of the pandemic despite muted loan growth, margin contraction and higher operating expenses. What led to the solid performance? Low credit cost underlined the bank’s earnings in…

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