State Bank of India (SBI) 4QFY21 result has been nothing less than spectacular. The bank reported 4QFY21 slippages of just Rs 54.7 billion (a 20-quarter low; surprisingly comparable to other Private Banks), thus taking total slippages for FY21 to Rs 285 billion (1.2% of loans), while restructuring book stands controlled at 0.7% of loans.

GNPAs fell 15% in FY21 (43% decline over the past three years), while the coverage ratio has increased to 71% at present from ~40% four years back. Its earnings in FY21 have been more than the sum of what it did in the last five years (FY16-20).

Commenting on the result review, Motilal Oswal Institutional Equities said, "Overall, the bank is making strong progress on earnings normalization (FY21 RoE of ~9.3%). We expect the bank to deliver FY22E/FY23E RoE of 13.9%/15%. We maintain our BUY rating with a revised TP of Rs 530/share (1.1x FY23E ABV+Rs 187/share from subsidiaries). SBIN continues to remain among our top Buys in the sector."

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