State Bank of India (SBIN) reported a steady quarter, with earnings beat of 12% on MOSLE. This was aided by controlled provisions despite a challenging environment. Core operating performance was in-line.Asset quality ratios deteriorated marginally on elevated slippage in Retail/SME. However, the management clarified that slippage worth ~Rs 48 billion has already been recovered/upgraded in July'21. Furthermore, the total restructured book remained in check, while SMA 1/2 (exposure of >Rs 50 million) was stable QoQ at Rs 113 billion (~0.5% of loans).

Commenting on the result review, Motilal Oswal Institutional Equities said, "The bank is gaining momentum in earnings every quarter. Thus, we estimate SBI to deliver FY22/FY23 RoE of 13.1%/14.6%, even as we build in credit cost of 1.6%/1.3% for FY22E/FY23E. Maintain BUY, with revised TP of Rs 600 (1.4x FY23E ABV + Rs 193 from subs)."  

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