Goldman gives SBI a thumbs down: Downgrades, cuts target price to Rs 1,900
Goldman says SBI could post a "tough" year in fiscal 2014 given expectations the lender will continue to face margin pressure over its "aggressive" lending strategy.
Goldman Sachs downgrades State Bank of India (SBI) to "sell" from "neutral" and cut its target price to Rs 1,900 from Rs 2,420, citing concerns over the lender's stress levels and the company's desire to grow its loanbook.
Goldman says SBI could post a "tough" year in fiscal 2014 given expectations the lender will continue to face margin pressure over its "aggressive" lending strategy.
Goldman further expects stress loan formation to remain elevated, especially if the economy weakens, while it sees SBI's operating expenses increasing due to provisions for pensions.
Last week, SBI posted its first quarterly net profit drop in two years.
SBI's shares were up 0.18 percent as of 1.20 p.m.
Reuters
More from Economy
India’s trade surplus with US may cross $90 billion after tariff cuts, says SBI report
Inflation likely to be a big focus area for budget 2024, say sources
Explained: Will the Bank of Japan break tradition and raise interest rates?
UK enters recession, central bank admits
Explained: How the rising US dollar can affect everyone