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					 State Bank of India               CMP: Rs. 1729.90

    Q2FY12 Result Update                                                                                            November 15, 2011

State Bank of India recently came out with its Q2FY12 results. The bank took a serious hit on its asset quality during the quarter and
witnessed delinquencies rise substantially during the quarter. The bank reported Gross NPA% at 4.19% during the quarter while the
Net NPA% of the bank stood at 2.04% in Q2FY12. The bank reported a net interest income of Rs 10421.94 crs in Q2FY12 as against
Rs 8114.87 crs in Q2FY11 and Rs 9699.53 crs in Q1FY12. The PAT of the bank stood at Rs 2810.43 crs in Q2FY12 as against Rs
2501.37 crs in Q2FY11 and Rs 1583.55 crs in Q1FY12.

On a consolidated basis, the bank reported net interest income of Rs 13813.25 crs in Q2FY12 as against R s 11460.29 crs in Q2FY11
while the Consolidated PAT stood at Rs 3470.43 crs in Q2FY12 as against Rs 2363.95 crs in Q2FY11.

Quarter Financials Standalone

Particulars (in Rs Crs)                                Q2FY12     Q2FY11    % Chg     Q1FY12    % Chg     H1FY12      H1FY11   % Chg
Interest Earned
 Interest/Discount on Advances/Bills                  19788.88   14580.78    35.72   18256.35     8.39   38045.23   28002.87    35.86
 Interest on Investment                                5853.35    4804.35    21.83    5413.78     8.12   11267.13    9276.59    21.46
 Interest on bal. with RBI & other inter bank funds      39.40      81.91   -51.90     166.27   -76.30     205.67     219.75    -6.41
 Other Interest                                         285.46     341.05   -16.30     361.04   -20.93     646.50     761.00   -15.05
 INTEREST EARNED                                      25967.09   19808.09    31.09   24197.44     7.31   50164.53   38260.21    31.11
Other Income                                           3427.23    4005.21   -14.43    3534.23    -3.03    6961.46    7695.17    -9.53
Total Income                                          29394.32   23813.30    23.44   27731.67     6.00   57125.99   45955.38    24.31
Operating Expenses                                     6374.86    5763.07    10.62    5991.32     6.40   12366.18   10622.39    16.42
 Payments to / Provisions for employees                3914.33    3675.77     6.49    3717.37     5.30    7631.70    6749.70    13.07
 Other operating expenses                              2460.53    2087.30    17.88    2273.95     8.21    4734.48    3872.69    22.25
 Interest Expended                                    15545.15   11693.22    32.94   14497.91     7.22   30043.06   22841.62    31.53
 TOTAL OPERATING EXPENSES                             21920.01   17456.29    25.57   20489.23     6.98   42409.24   33464.01    26.73
Net Interest Income                                   10421.94    8114.87    28.43    9699.53     7.45   20121.47   15418.59    30.50
Operating Profit Before Prov. & Cont.                  7474.31    6357.01    17.58    7242.44     3.20   14716.75   12491.37    17.82
Provisions & Contingencies                             3385.50    2621.47    29.15    4156.90   -18.56    7542.40    4172.84    80.75
PBT                                                    4088.81    3735.54     9.46    3085.54    32.52    7174.35    8318.53   -13.75
Provision for Taxes                                    1278.38    1234.17     3.58    1501.99   -14.89    2780.37    2902.96    -4.22
Net Profit                                             2810.43    2501.37    12.36    1583.55    77.48    4393.98    5415.57   -18.86
EPS (Rs.)                                                44.26      39.39    12.36      24.94    77.48      69.20      85.30   -18.88
Equity                                                  635.00     635.00     0.00     635.00     0.00     635.00     634.88     0.02
Face Value                                               10.00      10.00     0.00      10.00     0.00      10.00      10.00     0.00
PATM(%)                                                  10.82      12.63   -14.29       6.54    65.38       8.76      14.15   -38.12
Capital Adequacy Ratio %                                 11.40      13.20   -13.64      11.60    -1.72      11.40      12.48    -8.65
Gross Non Performing Assets                           33946.31   23204.59    46.29   27768.28    22.25   33946.31   23204.59    46.29
Net Non Performing Assets                             16120.49   11601.23    38.96   12435.20    29.64   16120.49   11601.23    38.96
(%) Gross Non Performing Assets                           4.19       3.35    25.07       3.52    19.03       4.19       3.35    25.07
(%) Net Non Performing Assets                             2.04       1.70    20.00       1.61    26.71       2.04       1.70    20.00

Quarter Financials Consolidated

Particulars (in Rs Crs)                                Q2FY12     Q2FY11    % Chg Q1FY12        % Chg     H1FY12      H1FY11   % Chg
Interest Earned
Interest/Discount on Advances/Bills                   26862.82   20570.71    30.59 25102.50       7.01   51965.32   39723.16    30.82
Interest on Investment                                 8292.74    6838.69    21.26 7681.67        7.95   15974.41   13327.56    19.86
Interest on bal. with RBI & other inter bank funds      148.15     150.87    -1.80 252.73       -41.38     400.88     384.52     4.25
Other Interest                                          398.06     358.76    10.95 380.01         4.75     778.07     796.74    -2.34
INTEREST EARNED                                       35701.77   27919.03    27.88 33416.91       6.84   69118.68   54231.98    27.45
Other Income                                           5547.31   10006.41   -44.56 5709.15       -2.83   11256.46   16501.52   -31.79
Total Income                                          41249.08   37925.44     8.76 39126.06       5.43   80375.14   70733.50    13.63
Operating Expenses                                     9858.74   13286.31   -25.80 9586.68        2.84   19445.42   21973.12   -11.50
Payments to / Provisions for employees                 5129.53    5220.03    -1.73 4930.62        4.03   10060.15    9400.64     7.02
Other operating expenses                               4729.21    8066.28   -41.37 4656.06        1.57    9385.27   12572.48   -25.35
Interest Expended                                     21888.52   16458.74    32.99 20292.89       7.86   42181.41   32420.67    30.11
TOTAL OPERATING EXPENSES                              31747.26   29745.05     6.73 29879.57       6.25   61626.83   54393.79    13.30
Net Interest Income                                   13813.25   11460.29    20.53 13124.02       5.25   26937.27   21811.31    23.50
Operating Profit Before Prov. & Cont.                  9501.82    8180.39    16.15 9246.49        2.76   18748.31   16339.71    14.74
Provisions & Contingencies                             4374.89    3571.18    22.51 4944.36      -11.52    8990.42    6083.25    47.79

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Exceptional Items                                                                                       0.00                           470.80                 -100.00                   0.00                            0.00                0.00          470.80          -100.00
PBT                                                                                                  5126.93                          4138.41                   23.89                4302.13                           19.17             9757.89         9785.66            -0.28
Provision for Taxes                                                                                  1586.17                          1701.29                   -6.77                1860.69                          -14.75             3446.86         3881.45           -11.20
Net Profit                                                                                           3540.76                          2437.12                   45.28                2441.44                           45.03             6311.03         5904.21             6.89
Minority Interest                                                                                      70.33                            73.17                   -3.88                  71.03                           -0.99              328.13          175.00            87.50
PAT after Minority Interest                                                                          3470.43                          2363.95                   46.81                2512.47                           38.13             5982.90         5729.21             4.43
EPS (Rs.)                                                                                              55.76                            38.38                   45.28                  38.45                           45.03               99.39           92.98             6.89
Equity                                                                                                635.00                           635.00                    0.00                 635.00                            0.00              635.00          635.00             0.00
Face Value                                                                                             10.00                            10.00                    0.00                  10.00                            0.00               10.00           10.00             0.00
PATM (%)                                                                                                9.92                             8.73                   13.61                   7.31                           35.75                9.13           10.89           -16.13

Some of the key highlights of the standalone results are as follows:

§ Net Interest Margin: SBI has reported a Net Interest Income growth of 28.43% y       -o-y and 7.45% q-o-q to Rs 10421.94 crs in
  Q2FY12. The growth was despite a marginally higher growth in the interest expenses on a y-o-y basis as compared to the growth
  witnessed in the interest income. When considered on q-o-q basis, the bank has managed to restrict its growth in the interest
  expenses to just 7.2%. This led the bank to report a strong growth in the net interest margin, which stood at 3.79% in Q2FY12 as
  against 3.30% in Q2FY11 and 3.62% in Q1FY12. Domestic NIM touched 4.07% in Q2FY12 vs. 3.77% in Q2FY11. The bank has
  done well to keep its margins expanding during the quarter despite the consistent interest rate rising scenario. On the spreads front
  too the bank has done well. The yield on advances of the bank stood at 10.71% in Q2FY12 while the cost of deposits stood at 5.83%
  in Q2FY12 thereby leading to an interest spread of 4.88% in Q2FY12 as against 4.77% in Q1FY12 and 4.25% in Q2FY11.

                                 Spread Movement                                                                                                                                                                      NIM %


     12.00                                                                                                                     6.00            3.80%
     10.00                                                                                                                     5.00            3.60%
      8.00                                                                                                                     4.00            3.40%
      6.00                                                                                                                     3.00            3.20%
      4.00                                                                                                                     2.00            3.00%
      2.00                                                                                                                     1.00            2.80%
      0.00                                                                                                                     0.00            2.60%
               Q3FY10

                        Q4FY10

                                   Q1FY11

                                              Q2FY11

                                                           Q3FY11

                                                                         Q4FY11

                                                                                           Q1FY12

                                                                                                             Q2FY12




                                                                                                                                               2.40%
                                                                                                                                               2.20%
                                                                                                                                                              Q3FY08


                                                                                                                                                                            Q1FY09


                                                                                                                                                                                                Q3FY09


                                                                                                                                                                                                                  Q1FY10


                                                                                                                                                                                                                                Q3FY10


                                                                                                                                                                                                                                               Q1FY11


                                                                                                                                                                                                                                                        Q3FY11


                                                                                                                                                                                                                                                                 Q1FY12
               YOA LHS                        COD LHS                                      Spread RHS


§ Deposits and CASA: At the end of Q2FY12, the bank reported total domestic deposits of Rs 917289 crs as against Rs 807774 crs in
  Q2FY11 and Rs 899885 crs in Q1FY12. The term deposits of the bank stood at Rs 482249 crs in Q2FY12 as against Rs 424725 crs
  in Q2FY11 and Rs 469527 crs in Q1FY12. Retail Term Deposits grew by Rs 42568 crs (13.24%) y-o-y to Rs 364145 crs in Q2FY12.
  On the CASA front the bank has seen a dip with marginal drop both on y-o-y and q-o-q basis. The bank reported a CASA of 47.62%
  in Q2FY12 as against 47.79% in Q2FY11 and 48.66% in Q1FY12. The savings deposits of the bank stood at Rs 352408 crs in
  Q2FY12 as against Rs 303949 crs in Q2FY11 and Rs 344387 crs in Q1FY12 while the current account stood at Rs 82632 crs in
  Q2FY12 as against Rs 79100 crs in Q2 FY11 and Rs 85971 crs in Q1FY12. Though the CASA% saw a fall both on a sequential and
  y-o-y basis, it still remains healthy and is one of the best in the industry.

                                                                                                                                          CASA %

                                 50.00

                                 48.00

                                 46.00

                                 44.00

                                 42.00

                                 40.00

                                 38.00

                                 36.00
                                            Q3FY08

                                                       Q4FY08


                                                                    Q1FY09

                                                                                  Q2FY09

                                                                                                    Q3FY09


                                                                                                                      Q4FY09

                                                                                                                                 Q1FY10


                                                                                                                                            Q2FY10

                                                                                                                                                     Q3FY10


                                                                                                                                                                  Q4FY10

                                                                                                                                                                           Q1FY11

                                                                                                                                                                                       Q2FY11


                                                                                                                                                                                                         Q3FY11

                                                                                                                                                                                                                       Q4FY11


                                                                                                                                                                                                                                Q1FY12

                                                                                                                                                                                                                                          Q2FY12




• Other income: The other income of the bank has been disappointing during the quarter as it fell both on a y-o-y and sequential
  basis. This trend has been now continuing for the second straight quarter for the bank where it is witnessing a drop in its other

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  income both on an yearly and sequential basis. The total oth er income of the bank stood at Rs 3427 crs in Q2FY12 as against Rs
  4006 crs in Q2FY11 and Rs 3534 crs in Q1FY12. The drop in the other income of the bank was mainly due to the drop witnessed in
  fee income, profit on sale of investments and dividend income.

  Particulars                             Q2FY12     Q2FY11        % Chg    Q1FY12        % Chg     H1FY12       H1FY11      % Chg
  Fee Income                              2600.00    2945.00       -11.71   2633.00        -1.25    5233.00      5355.00      -2.28
  Profit on Sale of Inv                     28.00     193.00       -85.49    169.00       -83.43     197.00       366.00     -46.17
  Forex Income                             481.00     309.00        55.66    331.00        45.32     812.00       811.00       0.12
  Dividend                                  84.00     288.00       -70.83    228.00       -63.16     312.00       665.00     -53.08
  Misc Other Income                        234.00     271.00       -13.65    173.00        35.26     408.00       498.00     -18.07
  Total Other Income                      3427.00    4006.00       -14.45   3534.00        -3.03    6962.00      7695.00      -9.53

§ Operating expenses & provisions: The operating expenses of the bank in Q2FY12 stood at Rs 6375 crs as against Rs 5763 crs in
  Q2FY11 and Rs 5991 crs in Q1FY12. Operating Expenses have increased by only 10.62% due to containment of staff expenses
  growth at 6.49% despite increase in DA payment by 40.49% y-o-y.

  SBI’s Q2FY12 tax rate stood at 31.26% vs. 48.67% in Q1FY12. Total provisions increased by Rs. 808 crs (20.96%) y-o-y mainly on
  account of higher loan loss provisions. Total provisions for H1FY12 have gone up by 45.89%. This was due to Increase in Investment
  depreciation from Rs.133 crs in H1FY11 to Rs.1506 crs in H1FY12, an increase of Rs.1373 crs and Loan loss provisions are up by
  Rs.1807 crs, 46.38% y-o-y.

  Particulars                            Q2FY12      Q2FY11       % Chg     Q1FY12        % Chg     H1FY12        H1FY11      % Chg
  Income Tax Provisions                   1278.0      1234.0         3.6     1502.0        -14.9     2780.0       2903.0        -4.2
  Loan Loss Provisions                    2921.0      2162.0        35.1     2782.0          5.0     5703.0       3896.0       46.4
  Investment Depreciation                  458.0       432.0         6.0     1048.0        -56.3     1506.0        133.0     1032.3
  Standard Assets                          121.0        15.0       706.7      288.0        -58.0      409.0        121.0      238.0
  Other Provisions                        -115.0        13.0      -984.6           -            -      -76.0        23.0     -430.4
  Total Provisions                        4664.0      3856.0        21.0     5659.0        -17.6    10323.0       7076.0       45.9

§ Advances: Gross Advances were up from Rs. 693224 crs in September 2010 to Rs.810612 crs in September 2011. Credit Deposit
  Ratio (Domestic) is up at 75.81% as at the end of September 2011 from 74.70% at the end of September 2010, an increase of 111
  bps. Large Corporate advances have grown from Rs.93679 crs in Sept 2010 to Rs.113305 crs in Sept 2011 registering a growth of
  20.95%. Mid-Corporate Advances were up from Rs 142716 crs to Rs 161285 crs thereby registering a growth of 13.01% y-o-y. Retail
  advances have increased from Rs.149537 crs in Sept 2010 to Rs 168761 crs in Sept 2011, a growth of 12.86%. The main
  contributors were Home loans, which grew by 16.53% y-o-y from a level of Rs 79275 crs in Q2FY11 to Rs 92383 crs in Q2FY12,
  Auto Loans, which grew 25.13% y    -o-y, and Education Loans that grew by 15.64% y    -o-y. SME Advances of the Bank are up by
  20.74% from Rs 104387 crs in Q2FY11 to Rs 126041 crs in Q2FY12. The Agri advances were up from Rs 82018 crs in Q2FY11
  registering a growth of 16.84% y-o-y. The International advances were up 18.86% y-o-y from Rs 105476 crs in Q2FY11 to Rs 125364
  crs in Q2FY12.

  Advances Split                                                        Q2FY12                      Q2FY11                 Q1FY12
  Large Corporate                                                       113305                       93679                 114122
  Mid Corporate                                                         161285                      142716                 159586
  International                                                         125364                      105476                 110712
  SME                                                                   126041                      104387                 120327
  Retail                                                                168761                      149537                 165131
  Agri                                                                   95833                       82018                  95452
  Domestic                                                              685248                      587748                 677440
  Total                                                                 810612                      693224                 788153

  Diversified Exposure among Sectors
                                                                                                               % Share     % Share
  Sectors                                                      Q2FY12        Q2FY11            % Chg           Q2FY12      Q2FY11
  Commercial Real Estate                                         9195         13673            -32.75             1.13        1.97
  Construction                                                   8666          7201             20.34             1.07        1.04
  Engineering                                                   23983         20312             18.07             2.96        2.93
  Food Processing                                               21634         19707              9.78             2.67        2.84
  Gems & Jewellery                                               9315          7479             24.55             1.15        1.08
  Infrastructure - Total                                        73796         58429             26.30             9.10        8.43
  Of Which: Power                                               34367         24780             38.69             4.24        3.57
  Roads & Ports                                                 14293          9539             49.84             1.76        1.38
  Telecom                                                       15960         14539              9.77             1.97        2.10
  Other                                                          9176          9571             -4.13             1.13        1.38

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  Iron & Steel                                                           39310              29055                 35.30              4.85   4.19
  Petroleum                                                              20144              17513                 15.02              2.49   2.53
  Textiles                                                               33892              27604                 22.78              4.18   3.98

§ Asset Quality: The asset quality of the bank was the key highlight of Q2FY12 results of the bank. The bank witnessed a substantial
  drop in the asset quality as both the gross and net NPAs rose during the quarter. The Gross NPAs of the bank are reported at Rs
  33946.31 crs in Q2FY12 as against Rs 23204.59 crs in Q2FY11 and Rs 27768.28 crs in Q1FY12. The Net NPA of the bank stood at
  Rs 16120.49 crs in Q2FY12 as against Rs 11601.23 crs in Q2FY11 and Rs 12435.20 crs in Q1FY12. The GNPA% of the bank stood
  at 4.19% in Q2FY12 as against 3.35% in Q2FY11 and 3.52% in Q1FY12 whereas the Net NPA% stood at 2.04% in Q2FY12 as
  against 1.70% in Q2FY11 and 1.61% in Q1FY12. On the back of continued stress in Corporate, SME and Agri sectors, annualized
  slippage ratio remained elevated at 3.68%. The provision coverage ratio of the bank stood at 52.51% in Q2FY12 as against 50.00%
  in Q2FY11 and 55.22% in Q1FY12 without technical write offs. The Provision coverage ratio including technical write offs stood at
  63.50% in Q2FY12 as against 67.25% in Q1FY12 and 62.78% in Q2FY11. The fresh slippages of Rs 8016 crs in Q2FY12 included
  Rs 1268 crs in Agri, Rs 477 crs in Iron & Steel, Rs 290 crs in Textiles and 172 crs in Paper industries among others.

                                                                      Asset Quality

                        4.50
                        4.00
                        3.50
                        3.00
                        2.50
                        2.00
                        1.50
                        1.00
                        0.50
                        0.00
                                  Q1FY10



                                           Q2FY10



                                                    Q3FY10



                                                             Q4FY10



                                                                          Q1FY11



                                                                                   Q2FY11



                                                                                            Q3FY11



                                                                                                        Q4FY11



                                                                                                                 Q1FY12



                                                                                                                            Q2FY12
                                                               GNPA%               NNPA%


                               Movement of NPA                                     Q2FY12            Q1FY12          FY11
                               Opening Level of NPA                                 27768             25326         19535
                               Cash R ecovery                                         736              1199          3848
                               Up gradation                                          1036              1877          4499
                               Write Offs                                              66               662          4007
                               Fresh Slippages                                       8016              6180         18145
                               Net Increase                                          6178              2442          5791
                               Closing Level of NPAs                                33946             27768         25326

• Capital Adequacy Ratio: As on September 30 2011, CAR under Basel II stood at 11.40% with Tier I ratio of 7.47%. The CAR of the
  bank that currently stands at borderline is a risk as the minimum required by RBI is 9% CAR and Tier 1 ratio 6%. The bank is
  planning to come out with rights issue and is currently is in talks with the government. Given the current fiscal situation of the
  government, a rights issue may seem difficult in the next 1 – 2 quarters. The ROA of the bank stood at 0.87% in Q2FY12 as against
  0.87% in Q2FY11 and the ROE stood at 16.73% in Q2FY12 as against 14.76% in Q2FY11.

• Performance of Subsidiaries: The subsidiaries as a group performed well in Q2FY12. Operating Profit of Associate Banks
  increased by Rs.219 crs (6.57%) to reach a level of Rs. 3555 crore as on Sep 2011 as against Rs. 3336 crore in Sep 2010. SBI
  Cards & Payment Services Pvt. Ltd recorded a Net Profit of Rs.18.54 crs in H1FY12 as compared to Rs.7.60 crs in H1FY11 and
  Rs.7.10 crore in FY11. SBI Life Posted a profit after tax of Rs.200 crs as on 30th September 2011 vs. Rs 217 crs as on 30th
  September 2011.

Concerns

• Asset quality continues to be a major concern for the bank. It has one of the highest NPAs among large sized peers. The
  deterioration in asset quality seen in Q2FY12 is worrying. The slippage at 3.68% needs to be brought down sharply & soon. The
  coverage ratio also needs to increase further.

• In order to boost its profits going ahead, the bank would need to maintain/reduce the cost to income ratio at/from the current levels
  failing which could impact the margins of the bank. The cost income ratio of the bank at the end of Q2FY12 stood at 45.66% as
Retail Research                                                                                                                              4
  against 45.96% in Q2FY11. Though the bank has managed to stabilize the cost income ratio, it needs to make sure the trend
  continues going ahead as when compared sequentially the cost income ratio h as marginally gone up during the quarter.


                                                                               Cost -Income Ratio


                          60.00
                          58.00
                          56.00
                          54.00
                          52.00
                          50.00
                          48.00
                          46.00
                          44.00
                          42.00
                          40.00
                                  Q1FY09

                                           Q2FY09

                                                    Q3FY09

                                                             Q4FY09

                                                                      Q1FY10

                                                                                Q2FY10

                                                                                         Q3FY10

                                                                                                  Q4FY10

                                                                                                           Q1FY11

                                                                                                                    Q2FY11

                                                                                                                             Q3FY11

                                                                                                                                      Q4FY11

                                                                                                                                               Q1FY12

                                                                                                                                                        Q2FY12
• The bank lends in international market. The concerns of rising NPAs abroad could affect the operations of SBI.

• Continued rise in interest rates could require it to make provisions against its large investment book.

• The largest shareholder i.e. the Central Government’s involvement could be contrary to the interests of minority shareholders.

• SBI needs to raise equity funds to boost capital adequacy in FY12. Though the timing and pricing of this uncertain at this point, it
  could lead to equity dilution and pressure on ROE.

• Though the NIMs of the bank have shown an increase during the quarter, the existing pressure in the margins of the whole banking
  sector could be a matter of concern for the bank and going ahead, it could be tough for the bank to maintain NIMs at such levels.

• The recent deregulation of the interest rates by the RBI could lead to strong competition going ahead as some of the private sector
  banks are offering higher rates on savings accounts and this could in turn impact the margins of the bank.

Conclusion

State Bank of India is the largest public sector bank in the country. It has maintained its leadership position across financial products
and has aggressively expanded its deposit and advances book in the recent past thus gaining market share. SBI recorded a loan
growth of 17% y-o-y mainly driven by retail and large & mid-corporate segments. At the end of Q2FY12, the bank had a total network of
13665 domestic branches and 164 overseas branches. The management has guided for NIMs of 3.5 -3.6%, loan growth of 16 –19%
and deposit growth of 19% for FY12.

The asset quality of the bank continues to be a matter of concern. The asset quality of the bank has continued to deteriorate in
Q2FY12. SBI remains leveraged to the economy. It can under perform if we see another round of economic slowdown. Rising NPAs,
requirement of enhanced provisions and dilution of equity are key threats to the share performance going forward.

SBI has a large deposit base, attractive CASA ratio, well balanced loan portfolio and has people, processes and technology in place.
Key risks are RBI's further monetary policy stance and any risk to economic growth at macro level, which can impact potential loan
growth and asset quality in FY12. In the present uncertain scenario, SBI could be flooded with savings & term deposits, which need to
be deployed carefully.

In our Q1FY12 result updated dated August 22, 2011, we had stated that the stock could trade in the Rs.1928 – Rs.2301 band (1.55 -
1.85 consolidated Adj. BV for FY12E) over the next quarter. Post the report, the stock made a low of Rs 1708.55 on 05th October 2011
and a high of Rs 2082.10 on 24th August 2011.

The pressure of improving the asset quality of the bank lies strong and the pressure on NIMs on the entire banking sector could impact
the bank’s operations / valuation going ahead. With a large base, the bank could find it difficult to improve its asset quality substantially
in the coming quarters. We are revising our estimates for FY12 post the disappointing numbers for Q2FY12.

We feel that the stock could trade in Rs 1545 to Rs 1946 (1.35x to 1.7x FY12E Cons Adj. BV) band over the next quarter.




Retail Research                                                                                                                                                  5
Standalone Financials – Quick Estimates

Particulars (Rs Crs)                                        FY08             FY09            FY10             FY11            FY12 OE             FY12 RE
Net Interest Income                                     17021.23         20873.14        23671.44         32526.40           37378.17            40447.28
% growth                                                    0.00            22.63           13.41            37.41               14.92              24.35
Operating Profit                                        13107.55         17915.23        18320.91         25335.57           28193.60            29358.14
% growth                                                    0.00            36.68            2.26            38.29               11.28              15.88
Provisions & Cont                                        2668.65          3734.57         4394.83         10381.34            9178.60            12769.05
% growth                                                    0.00            39.94           17.68           136.22              -11.59              23.00
PBT                                                     10438.91         14180.66        13926.08         14954.23           19015.00            16589.09
% growth                                                    0.00            35.84           -1.80             7.38               27.15              10.93
PAT                                                      6729.12          9121.24         9166.05          8264.52           12359.75            11280.58
% growth                                                    0.00            35.55            0.49            -9.84               49.55              36.49
EPS                                                       106.56           143.67          144.37           130.15             194.64              177.65
% growth                                                    0.00            34.83            0.49            -9.85               49.55              36.49
Book Value Standalone                                     776.48           912.73         1039.55          1023.40            1172.96             1165.96
% growth                                                    0.00            17.55           13.89            -1.55               14.61              13.93
Adj. Book Value Standalone                                658.91           762.26          868.31           828.96             968.24              849.43
% growth                                                    0.00            15.68           13.91            -4.53               16.80               2.47
Book Value Consolidated                                   969.85          1140.36         1309.63          1314.50            1506.50             1505.88
% growth                                                    0.00            17.58           14.84             0.37               14.61              14.56
Adj. Book Value Consolidated                              852.27           989.89         1093.80          1079.38            1243.80             1144.47
% growth                                                    0.00            16.15           10.50            -1.32               15.23               6.03
                                                                                                                         Source: Capitaline, HDFC Sec Estimates




Analyst: Tiju K Samuel (tiju.samuel@hdfcsec.com )

RETAIL RESEARCH Tel: (022) 6661 1700 Fax: (022) 2496 5066 Corporate Office
Corporate Office: HDFC Securities Limited, I Think Techno Campus, Building –B, ”Alpha”, Office Floor 8, Near Kanjurmarg Station, Opp. Crompton
Greaves, Kanjurmarg (East), Mumbai 400 042 Fax: (022) 30753435 Website: www.hdfcsec.com

Disclaimer: This document has been prepared by HDFC Securities Limited and is meant for sole use by the recipient and not for circulation. This
document is not to be reported or copied or made available to others. It should not be considered to be taken as an offer to sell or a solicitation to buy
any security. The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be
relied upon as such. We may have from time to time positions or options on, and buy and sell securities referred to herein. We may from time to time
solicit from, or perform investment banking, or other services for, any company mentioned in this document. This report is intended for Retail Clients only
and not for any other category of clients, including, but not limited to, Institutional Clients




Retail Research                                                                                                                                           6

				
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