Invest in Chinese plays catering to local demand: Tyche Grp
Motilal Oswal has maintained its buy rating on State Bank of India (SBI) in its June 09, 2009 research report.
“Despite offering 10%+ rates on retail term deposits, SBI’s savings deposits grew 29% in FY09. We see pressure on margins and core income growth for SBI in FY10 due to excess liquidity in the balance sheet and lower pricing power as compared to previous year. Our numbers have positive upside due to lower NPA provisions as restructuring would lead to lower NPA additions/provisions in FY10.”
“We like SBI for its inherent strengths of unparallel distribution reach, brand value and customer franchise. SBI would be biggest beneficiary of economic revival in term of accelerating loan growth, improvement in margins and lowering concerns on NPAs. Stock trades at 1.5x FY10E Consol ABV and 1.3x FY11E Consol ABV. Maintain ‘Buy’,” says Motilal Oswal’s research report.