SBI on a very solid wicket with most legacy NPAs behind it and credit growth to improve once lockdowns are relaxed; lower credit costs should improve return ratios

United Breweries is a good play on return to normalcy; volumes have held up well despite lockdown and resultant decline on out of home consumption. Expect good times post lockdown relaxation
August 16, 2021
Sharp rise in tea prices, impacted Tata Consumer performance in the near term, but long term trajectory is attractive with presence in growth segments of the FMCG industry and steady value being created in JV with Starbucks
August 16, 2021

The State Bank of India (SBI) is India’s largest bank with a ~ 23% market share in assets and one-fourth of deposits market. The Bank has finally repaired its balance sheet which was a quagmire of bad and doubtful debts. We have an over weight rating on the stock as we expect financials to improve over the next 4-8 quarters as credit growth will improve with post-Covid recovery in economic activity and NPAs will be low due to legacy accounts provided for or resolved. Main risk factor is further slippage in bad loans due to current health crisis. Inexpensive valuations and value of non-banking subsidiaries is comforting – 11-08-2021 Price 428 Rating: Over Weight Recommendation: Buy

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