InvestorQ : SBI has posted a profit in this quarter so is it times to start to accumulate the stock at these levels?
Dhwani Mehta made post

SBI has posted a profit in this quarter so is it times to start to accumulate the stock at these levels?

Answer
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Khushi Patel answered.
1 year ago


For the fourth quarter ended March, SBI had a net profit of Rs.838 crore but that was substantially lower than the market estimates of Rs.4890 crore that SBI expected to post in the fourth quarter. Provisions jumped by 2.5 times in this quarter to Rs.16,500 crore. The provisions were sharply higher this quarter because the bank made full provisions for its exposure to Essar Steel and Bhushan Steel and Power. The NIM improved marginally to 3.02% but that still remains way below what the private banks command at this point of time.

In terms of buying the stock, it did bounce back sharply in late trades after the bank hinted that most of the loan stress was taken care and that there would not be too many negative surprises. However, there are still big exposures like Jet Airways, Dewan Housing and IL&FS where it is not to clear what will be the outcome and how much provisions may be required. The stock is currently quoting at Rs.307 and that is closer to the top made by the company during the year. The big question mark is over the future risks in the balance sheet, especially when it comes to exposures in the service sector where there is scope for NCLT. You should be careful about buying SBI currently unless there is greater clarity on the actual asset quality front.


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K V RAO answered.
1 year ago


Please read "Kotak" instead of "Loyal" ony answer.


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K V RAO answered.
1 year ago


Profit of Rs 856 Cr for the quarter Jan- mar is peanut when we consider its total business (loans and deposits). SBI has been struggling to keep its face just above water. In India given the landscape of ownership in banking sector, bank stocks should be avoided, short and long term. If you are very keen on bank stocks go for HDFC Bank and Loyal Mahindra. Here also scope for appreciation is less in the short term but appreciation level of 15-20% can be expected in the long term.


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K V RAO answered.
1 year ago


Profit of Rs 856 Cr for the quarter Jan- mar is peanut when we consider its total business (loans and deposits). SBI has been struggling to keep its face just above water. In India given the landscape of ownership in banking sector, bank stocks should be avoided, short and long term. If you are very keen on bank stocks go for HDFC Bank and Loyal Mahindra. Here also scope for appreciation is less in the short term but appreciation level of 15-20% can be expected in the long term.