BQ Blue's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BloombergQuint's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Among public sector undertaking banks, State Bank of India remains the best play on a gradual recovery in the Indian economy, with a healthy provision coverage ratio, tier I of ~11.3%, strong liability franchise and improved core operating profit.
While business trends were impacted by the lockdowns, SBI's loan growth is likely to recover gradually over FY22-23E.
Even slippages are expected to moderate meaningfully over H2 FY22 as asset quality remains impeccable in the retail book.
We estimate credit costs of 1.6%/1.3% for FY22E/FY23E.
We project return on asset/return on equity of 0.8%/14.6% by FY23E.
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