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SBI extends gains from Friday, rises another 5% on March quarter performance

by LiveMint
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MUMBAI: Shares of State Bank of India (SBI) extended gains on Monday, rising 5.3%, as the lender reported a surge in its March quarter net profit to 3,580.81 from 838.4 in year-ago period.

At 0105 pm, shares traded at 193.10, up 2.8% from its previous close, while the benchmark Sensex was up 1.3% at 34751.17. The stock had risen 8% on Friday.

Total income at the lender rose 0.4% to 76,027.51 crore in the quarter under review.

Analysts at Emkay Global Financial, in a note to clients, said, “Gross slippages were lower at 8,300 crore due to absence of lumpy corporate Non Performing Assets(NPA), but agri NPAs were far higher at 5,200 crore. The bank, among Public Sector Banks, has strong liability profile, higher retail orientation and reasonable capital position, while valuations 0.3 times FY2202E core absolute book value also look attractive”. they added. The brokerage has a buy rating on the stock.

Motilal Oswal believes said, “SBI has prudently improved provision coverage ratio over the last few years and has one of the lowest stressed assets among the corporate banks. The proportion of the moratorium book also stands lower than most peers, aided by higher exposure to salaried government and PSU employees.”

It has reported a decent operating performance in a very challenging environment. Slippages stood at a four-quarter low, aided by the Reserve Bank of India’s dispensation, resulting in improved asset quality ratios. This would enable it to maintain strong control over credit cost as the impact of covid-19 becomes visible in second half of FY2021, the brokerage firm added. It also has a buy rating on the stock.

HDFC Securities said, “Asset quality improved, even if one adjusts for the standstill classification impact, but this improvement was aided by higher with outstandings. The moratorium percentage is unusually low against peers and the related disclosures were ambiguous. With current valuations and a strong deposit it is trading at 0.75 times FY2022E of the absolute book value.” The brokerage has a buy rating on the stock.

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This SBI extends gains from Friday, rises another 5% on March quarter performance was originally published on https://www.livemint.com/companies/news/sbi-extends-gains-from-friday-rises-another-5-on-march-quarter-performance-11591602006599.html

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