25 May 2021
NRG Consultants Pvt. Ltd.
B-3/63, Hauz Khas, New Delhi- 110016, India
Industrial credit remains low
• Commercial bank credit in India contracted
0.8 per cent in April, reflecting a slow fiscal
period at the start of the new financial year
and the adverse effect of the second wave
of Covid-19. The outstanding credit as of
April 23, 2021, was Rs 108.60 trillion,
according to RBI data.
• Growth in credit to medium industries
continued to surge, reaching 28.8% YoY.
• Service sector credit lines decelerated to
1.4 per cent in March from 7.4 per cent in
March 2020, mainly due to deceleration in
credit growth to finance and contraction in
credit to professional services.
• The health crisis and lockdown have hit
consumer and credit demand significantly.
• Underlying demand from customers
remains strong with preference for digital
payments and online purchase on the rise.
• Credit towards sugar processing is lowest
in among all the industries at -17% YoY
Retail credit growth improves
• Personal loan segment continued to
improve in growth to 10.2% YoY, after
hitting a 10-year low of 9.1% YoY in
January.
• Retail sector was headed by house loans
and gold loans.
• Liquidity injected in the market by RBI and
lowest home loan rates in 4 decades has
been a major cause in home credit growth.
• YoY figures for non-food credit is estimated
to come back to 8-10% YoY growth within
12 months.
Sectorial Report
Tel: +91-11-41025216 Banking
Market Update
• HDFC Bank expects resilient retail segment
to report higher asset quality stress because
of the second wave of Covid-19 infections.
• HDFC bank as also been affected by the ban
on its credit card insurances which SBI and
ICICI has taken much profit for.
• RBI governor on 26th may asked CEOs of
select private banks to quickly adjust to
follow through announcements from 5th
May (liquidity facility of Rs 50,000 crore to
ease access to emergency health services).
• Also asked to continue provision of various
credit facilities to rural areas and
businesses.
• Banks are looking towards gold loans to
drive their credit growth. SBI and Bandhan
bank saw highest increase in gold loans.
• According to various reports, mid size banks
are going to be better stock picks due to
asset quality concerns and loan sizes.
• Smaller banks are facing the brunt of the
2nd covid wave the most, with pandemic
going deeper into rural India. Provision
coverage ratio against bad loans has fallen
from 60% and above to lower 50% levels.
• Recent measures from the RBI to induce
liquidity in the market worth 99,122cr as
surplus can create inflation and is expected
to increase debt-to-GDP ratio from 72% in
2020 to 90% in 2021.
• RBI can be seen in way trying to reduce
public debt and inflation for post covid
period through its recent banking measures
and indirect meddling to private sector
banks and buffer loses from direct and
indirect tax collections.
 25 May 2021
NRG Consultants Pvt. Ltd. Sectorial Report
B-3/63, Hauz Khas, New Delhi- 110016, India
Tel: +91-11-41025216 Banking

Credit Deployment Industry-Wise (In Crore)

Industry Feb 26, 2021 Feb YOY MoM Jan 28, 2021 Feb 28, 2020

2.1 Mining & Quarrying (incl. Coal) ₹44,393.00 6.71% -2.38% ₹45,477.00 ₹41,600.00
2.2 Food Processing ₹1,52,568.00 1.81% -1.80% ₹1,55,367.00 ₹1,49,851.00
2.2.1Sugar ₹22,049.00 -17.18% 3.71% ₹21,261.00 ₹26,623.00
2.2.2Edible Oils & Vanaspati ₹19,799.00 1.74% 0.61% ₹19,678.00 ₹19,461.00
2.2.3Tea ₹5,506.00 4.08% -3.88% ₹5,728.00 ₹5,290.00
2.2.4Others ₹1,05,214.00 6.84% -3.21% ₹1,08,700.00 ₹98,476.00
2.3 Beverage & Tobacco ₹16,117.00 7.00% 6.85% ₹15,084.00 ₹15,063.00
2.4 Textiles ₹2,03,029.00 7.96% -3.07% ₹2,09,457.00 ₹1,88,067.00
2.5 Leather & Leather Products ₹11,358.00 5.95% 1.38% ₹11,203.00 ₹10,720.00
2.6 Wood & Wood Products ₹13,272.00 9.67% -0.10% ₹13,285.00 ₹12,102.00
2.7 Paper & Paper Products ₹35,353.00 15.51% 1.20% ₹34,933.00 ₹30,607.00
Petroleum, Coal Products &
2.8 ₹59,991.00 2.24% 6.02% ₹56,586.00 ₹58,679.00
Nuclear Fuels
Chemicals & Chemical
2.9 ₹1,79,163.00 -2.76% -1.25% ₹1,81,423.00 ₹1,84,239.00
Products
2.9.1Fertiliser ₹32,455.00 -12.35% -20.14% ₹40,642.00 ₹37,028.00
2.9.2Drugs & Pharmaceuticals ₹50,023.00 -1.31% 0.67% ₹49,688.00 ₹50,685.00
2.9.3Petro Chemicals ₹41,602.00 3.52% 10.95% ₹37,497.00 ₹40,188.00
2.9.4Others ₹55,082.00 -2.23% 2.77% ₹53,596.00 ₹56,339.00
Rubber, Plastic & their
2.10 ₹51,951.00 6.56% 2.61% ₹50,630.00 ₹48,752.00
Products
2.11 Glass & Glassware ₹9,209.00 8.42% 0.68% ₹9,147.00 ₹8,494.00
2.12 Cement & Cement Products ₹57,655.00 1.80% 0.21% ₹57,536.00 ₹56,634.00
2.13 Basic Metal & Metal Product ₹3,29,889.00 -1.11% 0.52% ₹3,28,174.00 ₹3,33,597.00
2.13.1Iron & Steel ₹2,40,559.00 -4.14% 0.09% ₹2,40,332.00 ₹2,50,942.00
2.13.2Other Metal & Metal Product ₹89,330.00 8.08% 1.70% ₹87,841.00 ₹82,655.00
2.14 All Engineering ₹1,43,925.00 -7.40% 0.93% ₹1,42,592.00 ₹1,55,428.00
2.14.1Electronics ₹31,533.00 -4.16% 2.16% ₹30,866.00 ₹32,900.00
2.14.2Others ₹1,12,392.00 -8.27% 0.60% ₹1,11,726.00 ₹1,22,528.00
Vehicles, Vehicle Parts &
2.15 ₹82,573.00 4.38% -1.45% ₹83,784.00 ₹79,111.00
Transport Equipment
2.16 Gems & Jewellery ₹61,175.00 3.43% -0.28% ₹61,347.00 ₹59,147.00
2.17 Construction ₹97,133.00 -6.58% -2.42% ₹99,542.00 ₹1,03,972.00
2.18 Infrastructure ₹10,03,000.00 -1.55% 0.67% ₹9,96,326.00 ₹10,18,749.00
2.18.1Power ₹5,53,216.00 2.64% -0.75% ₹5,57,395.00 ₹5,38,993.00
2.18.2Telecommunications ₹89,972.00 -36.27% 4.64% ₹85,984.00 ₹1,41,171.00
2.18.3Roads ₹2,01,052.00 8.01% 3.19% ₹1,94,843.00 ₹1,86,148.00
2.18.4Other Infrastructure ₹1,34,520.00 -11.75% 0.34% ₹1,34,059.00 ₹1,52,437.00
2.19 Other Industries ₹2,34,446.00 -1.49% 2.07% ₹2,29,682.00 ₹2,38,000.00
 25 May 2021
NRG Consultants Pvt. Ltd. Sectorial Report
B-3/63, Hauz Khas, New Delhi- 110016, India
Tel: +91-11-41025216 Banking
 25 May 2021
NRG Consultants Pvt. Ltd. Sectorial Report
B-3/63, Hauz Khas, New Delhi- 110016, India
Tel: +91-11-41025216 Banking

Stock Pick for the Month Target Price – 510

State Bank of India

Highlights
• Non-performing asset slippages are at an all time low
with slippage ratio at 1.18% and NPA at 5% with higher
retail asset quality among peers.
• Loan growth was up 5.3% YoY led by healthy retail
growth which grew by 16%YoY. Within Retail, Home,
Auto and Personal Loans grew 11%, 5% and 33% YoY,
respectively. Personal credit growth was highest in the
industry for SBI.
• Taken from the financial con-call transcript, the
management expects growth in retail loans to be better
than corporate loans. Corporate and SME segments
could see a pick-up on an economic growth rate of 10%.
• The bank’s subsidiaries have mixed performance.
SBICARD reported a net profit of rs 175cr in March 21
Qtr at a -16% QoQ. SBILIFE however, reported highest
ever net profit of rs 532.4cr in March 21 Qtr at 128.64%
QoQ.
Technicals
• Technical chart shows a support price level at
400.5 and formed a bullish Harami candlestick
pattern today.
• Ideal entry price for the stock should be ≤ 405
for a return of 19%-23%
• Fall in QoQ revenue in net profit is expected to
be in margins due to shortcomings from 2nd
wave.
• SBI can take profits from its credit card sector
after hold posed on HDFC on new card issuing
due to inadequacies in online banking.
• Impact of 2nd covid will be manageable if ROE is
maintained at 15%.
• Trendlyne indicators suggest the stock is in a
good buy zone with high financial strength and
mid valuation.

Financials

Indicator Mar-21 Dec-20 Sep-20 Jun-19 Mar-19

Total Revenue Qtr cr 103430.6 97182.1 95373.5 83486 91574.6

Operating Revenues Qtr

68032.7 70099.8 70043.1 65594.4 65784.5
Cr
Operating Expenses Qtr
43863.8 39468.3 37822.5 28213.2 32969
Cr

Operating Profit Qtr Cr -14219.9 -7665.3 -6802.6 -2758.1 -7621.8

Profit Before Tax Qtr Cr 9661.4 8615.4 7306.8 5684.8 1494.9

Net Profit Qtr Cr 6125.5 6257.6 5245.9 2950.5 1244.5

Basic EPS Qtr Rs 6.9 7 5.9 3.3 0.9

Basic EPS TTM Rs 25.1 26 26.3 10.6 2.6

Net Profit QoQ Growth % -2.11% 19.29% 9.83% 137.09% -73.57%

Revenue QoQ Growth % -2.95% 0.08% 0.15% -0.29% 1.35%

Net Profit Margin Qtr % 9.00% 8.93% 7.49% 4.50% 1.89%

 25 May 2021
NRG Consultants Pvt. Ltd. Sectorial Report
B-3/63, Hauz Khas, New Delhi- 110016, India
Tel: +91-11-41025216 Banking

Technical Chart

Shareholding Pattern

Others 0%

Public 7.80%

DII 24.60%

Promoter 57.60%

FII 9.90%

Promoter FII DII Public Others