EUR 120.00 For Business Accounts Only

MOSL: Morning India (31/October/19): 1. SBI (RoA progression in sight; execution remains the key); 2. Bharti Airtel; 3. Petronet LNG; 4. Container Corp; 5. The Ramco Cement; 6. Tata Chemicals; 7. Quess Corp; 8.

MOrning India (31/October/19): 1. SBI (RoA progression in sight; execution remains the key); 2. Bharti Airtel; 3. Petronet LNG; 4. Container Corp; 5. The Ramco Cement; 6. Tata Chemicals; 7. Quess Corp; 8. Automobiles

 Today’s top research idea

SBI: RoA progression in sight; execution remains the key

• On its investor day, SBIN discussed the business strategy/future roadmap for the group and also provided the baseline guidance on the key financial parameters for FY20/21.
• Management talked about the progress on ongoing resolutions and how the Stressed Assets Resolution Group (SARG) is helping the bank to maintain a healthy recovery run-rate.
• It expects the bank to deliver an RoA of 0.4%-0.5% in FY20 and 0.9%-1.0% in FY21, led by (a) credit growth of ~10%/12% with an NIM of 3.15%-3.2%, translating into NII growth of 17%/14% for FY20/21, (b) non-interest income growth of 15% for both years with opex growth sustaining at <10% and (c) a slippage ratio of 2.0%/1.3% in FY20/21, leading to credit cost of 1.8%/1.0%. Corporate slippages are guided at INR220b/INR120b for FY20/21.

Piping hot news

US Fed cuts rates but signals pause in easing cycle

The Federal Reserve on Wednesday cut interest rates for the third time this year in a move to ensure the US economy weathers a global trade war without slipping into a recession, but signaled its rate-cut cycle might be at a pause. In lowering its policy rate by a quarter of a percentage point to a target range of between 1.50% and 1.75%, the U.S. central bank dropped a previous reference in its policy statement that it "will act as appropriate" to sustain the economic expansion - language that was considered a sign for future rate cuts.