SBI jumps after brokerage upgrade

State Bank of India jumped 3.89% to Rs 1,837 at 15:01 IST on BSE after a foreign brokerage upgraded the stock to buy from neutral rating.

Meanwhile, the BSE Sensex was up 184.40 points, or 0.83%, to 22,279.70.

On BSE, so far 4.39 lakh shares were traded in the counter, compared with an average volume of 2.84 lakh shares in the past one quarter.

The stock hit a high of Rs 1,850 and a low of Rs 1,776 so far during the day. The stock hit a 52-week high of Rs 2,469.25 on 20 May 2013. The stock hit a 52-week low of Rs 1,452.90 on 28 August 2013.

The stock had outperformed the market over the past one month till 26 March 2014, rising 16.20% compared with the Sensex's 5.28% rise. The scrip had, however, underperformed the market in past one quarter, rising 0.80% as against Sensex's 4.84% rise.

The large-cap company has an equity capital of Rs 746.57 crore. Face value per share is Rs 10.

The brokerage also revised its price target on the State Bank of India (SBI) stock to Rs 2,080 from Rs 1,440 per share, citing the bank will benefit from economic recovery and lower slippages. The brokerage expects slippage ratio of the bank to decline to 3.2% in the fiscal year ending March 2016 (FY 2016) and stress loans to fall from 9.1% in Q3 December 2013 to 8.4% by FY 2016.

SBI's net profit fell 34.21% to Rs 2234.34 crore on 14.91% increase in total income to Rs 39060.76 crore in Q3 December 2013 over Q3 December 2012.

On a consolidated basis, SBI's net profit fell 38.93% to Rs 2838.62 crore on 15.12% increase in total income to Rs 58642.16 crore in Q3 December 2013 over Q3 December 2012.

SBI's ratio of net non-performing assets to net advances stood at 3.24% as on 31 December 2013, compared with 2.91% as on 30 September 2013 and 2.59% as on 31 December 2012.

The bank's ratio of gross non-performing assets (NPA) to gross advances stood at 5.73% as on 31 December 2013, compared with 5.64% as on 30 September 2013 and 5.30% as on 31 December 2012.

Provisions and contingencies rose 55.54% to Rs 4149.61 crore in Q3 December 2013 over Q3 December 2012. The provisioning coverage ratio as on 31 December 2013 stood at 58.32%.

The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 11.59% as on 31 December 2013, compared with 11.69% as on 30 September 2013.

In terms of RBI circular dated 23 August 2013 on Investment portfolio of banks -Classification, Valuation and Provisioning, the bank has option of distributing the net depreciation on the Available for Sale (AFS) and Held for Trading (HFT) portfolios on each of the valuation dates in the current financial year i.e. 2013-14 in equal installments. Accordingly, the bank has provided for a net depreciation as of 31 December 2013 to the extent of Rs 1267.92 crore. The un-provided depreciation as on 31 December 2013 is Rs 633.96 crore.

Government of India holds 58.60% stake in SBI (as on 3 February 2014).

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