Broker’s Call: SBI (Buy)

Target: INR 700

CMP: INR 567.40

Central Bank of IndiaSBIN’s FY23 Annual Report highlights that the bank is steadily strengthening its balance sheet and consistently delivering a healthy return on equity while maintaining its leadership position.

The Bank continues to focus on building an outstanding loan book, as evidenced by the continued reduction in stressful assets, improving PCR and strong loan growth (17 percent in FY23). Retail segment recorded a 2.5 times jump in PBT after Corporate segment showed a 5 times increase in PBT in FY22. SBIN achieved a compound annual profit growth rate of 51 per cent during FY20-23 and crossed a key milestone of INR 500 billion in profits In fiscal year 23.

On the digital front, YONO continued to set new records with approximately 143 million downloads and nearly 60 million registered users, along with an average daily login of approximately 10.3 million.

SBIN approved 1.39 million digital loans worth Rs. 24,300 crore and opened 64 per cent of savings accounts through YONO in FY23.

SBIN reported further improvement in asset quality, with PCR improving to 76 percent (98.6 percent in corporate book) in FY23. Controlled restructuring (0.8 percent), reduced SMA compound (10 basis points) and coverage provided by 100 percent on the SAR Convenience portfolio will keep credit costs under control. We repeat purchase with TP of Rs 700.