Analysis of SBI results  for the Second Quarter 2020

SBI:  State of India, one of the leading Banks has declared it's quarter 2 results.

Let's try to understand how the bank performance and where can we see the price of the stock from here in the coming months.

SBI has shown a significant 52 percent year on year growth in standalone profit this quarter.

The factors that has contributed the stock to show very good returns are lower provision, tax cost, and high net interest income.

Comparing the profits with the last quarter of last year to this years last quarter, one could find a huge rise of  Rs4574  comparing to last year quarter which stood at Rs 3012

Rs.4574 vs Rs.3012

Net Income Interest: The difference of Net income Earned to the Net income Expended. there is a Climb of around 14.6 percent growth in year on year basis

If we talk in value it is Rs 28181.5, the credit growth is at 6.02 percent year on year basis and Net Margin stood at 3.34 percent of the quarter.

When we talk depositaries, the deposit grew by 14.41 Year on Year basis with the current deposits raised nearly 9 percent, the saving deposit goes up by 16 percent again on year on year basis.

The above-mentioned figures or number clearly states an outstanding performance, Even the market expert failed to guess such an awesome number. In other words, it is exceeded the expectation.

The market is expecting the number to be around Rs28000 crores

"Bank has delivered a strong performance in Q2FY21 with all round improvement in profitability, capital adequacy and provision coverage ratio, including additional provision over minimum regulatory provisions required," said SBI.

If one would like to take or took at the drawback of the result would be the Non- Profit Assets. SBI confirmed that NPA still an area of concern to them.

Following the Supreme court order, the Bank has not declared any domestic loan lending 

Expected the Gross NPA And Net NPA stands at around 6 and 3 respectfully

The fresh Slippage there is a slight drop is seen ..Comparing it to the past it stands at Rs2756 compare to Rs 3637reported in June 2020. While the Gross Slippage is seen as Rs3085 vs Rs3910 of the previous quarter.

Provision Coverage Ratio: 88.19 vs 86.3 comparing it to the previous year. The provision coverage ratio would be 85.25 percent if the bank had followed the IRAC norms," SBI said in its BSE filing.

The most part of this quarter went into COVID so let see how it performed, during this period more provision is added.. The pre-provision operating profit is boosted by the stake sale in SBI Life Insurance.

Currently, Dinesh Kumar Khara is newly appointed by RBI as the Managing Director.

The worries over NPA, delay in stressed accounts resolution and loan growth slowdown continued to weigh on the banking sector, especially PSU banks.

Let talk about the price movement in SBI, the stock would definitely fly hereon opening as the stock has performed or moved mostly in a sideway direction.

In the most of time the stock has shown resistance at Rs 200 if it crosses then 210-215 which is expected to be the price on opening. 

The weightage of SBI in the Bank Nifty is around 11.15%.

 Analysis of Reliance Q2 results :

Markets one of the leading company Reliance has announced its Q2 results. Reliance has got a huge weightage in Nifty 50 almost 14.9 percentage. So it will be interesting to see whether it supports the falling Nifty and helps in gaining the lost path of 12000 or else it too tremble here and makes the Nifty to see a new low  Whatever it is it would be interesting to watch how the market is going to react to its results.

So let's try and Analysis the  results of the Reliance here

Ownership: Mukesh Ambani is the owner of the company 

The company in Q2  has shown a great set of numbers, not only that it has out beaten the expectations of the market too. As everyone is aware that Reliance is a muti business entrepreneur.

So this time the results are largely driven by Telecom and Retail business. Just not these two the overall all the businesses have seen a great rebounce backed by the Domestic demand.

 "We delivered strong overall operational and financial performance compared to the previous quarter with recovery in petrochemicals and retail segment and sustained growth in the digital services business," said Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries."

In the  Digital World, the company has performed outstandingly with substantial growth which took the financial numbers to a new high.

"Domestic demand has sharply recovered across our O2C business and is now near the pre-COVID level for most products. Retail business activity has normalized with strong growth in key consumption baskets as lockdowns ease across the country," the company's chairman said.

Let's have a took numbers: The consolidated profit stood at Rs 9567   where as the adjusted profit at Rs.8380. Whereas most of the market expert is expecting the number to be around Rs. 8200 around

There are a few jumps in the number like Consolidated Revenue of 27.3%, Consolidated quarterly net profits once again were back to above Rs 10,000 crore level. As per the expert, the main reason for the good results is because of higher price realizations in the O2C segment and very good growth in the digital space.

The revenue of the petrochemicals segment increased by 17.8 percent QoQ and Segment EBITDA increased by 34.6 percent QoQ to Rs 5,964 crore.

Even with the of GDP and the job report on the negative side The Reliance industry is able to provide more than 30000 new jobs in the last quarter.

RIL (standalone)

As per RIL's statement, revenue for the quarter stood at Rs 64,431 crore ($ 8.7 billion), up 23.3 percent sequentially.

EBITDA before exceptional item for the quarter was Rs 11,811 crore ($ 1.6 billion), higher by 4 percent, the company said.

Net profit before exceptional item for the quarter was Rs 6,546 crore ($ 887 million), higher by 34.3 percent.

Cash profit before exceptional item for the quarter was Rs 7,201 crore ($ 976 million), higher by 31.6 percent.

Exports for the quarter grew 5.6 percent to Rs 34,501 crore ($ 4.7 billion), the company said.

Jio Platforms (consolidated)

As per the company's statement, revenue (value of services) for this segment, including access revenues for the quarter, was Rs 21,708 crore ($ 2.9 billion) higher by 7.1 percent sequentially.

Revenue from operations rose 7.2 percent QoQ to Rs 18,496 crore.

EBITDA for the quarter stood at Rs 7,971 crore ($ 1.1 billion), up 8.7 percent. EBITDA margin came at 43.1 percent, up from 42.5 percent QoQ.

Net profit for the quarter came at Rs 3,020 crore ($ 409 million), registering a growth of 19.8 percent.

The total customer base as of September 30, 2020, was 40.56 crore, up 1.8 percent.

The company is the first telecom operator globally, outside China, to cross 40 crore subscribers in a single country market.

Reliance Retail (consolidated)

Revenue (value of sales and services) for this segment for the quarter jumped 30 percent sequentially to Rs 41,100 crore ($ 5.6 billion).

Revenue from operations jumped 29.7 percent QoQ to Rs 36,566 crore.

EBITDA for the quarter came at Rs 2,006 crore ($272 million), up 85.9 percent. EBITDA margin came at 5.5 percent against 3.8 percent QoQ.

Net profit for the quarter stood Rs 973 crore ($132 million), registering a strong growth of 125.8 percent.

Cash profit for the quarter was Rs 1,408 crore ($ 191 million), showing strong growth of 77.3 percent.

The company has 11,931 operational physical stores. It did a net addition of 125 stores during the September quarter.

Lets talk about the stock's performance and is it good to buy the stock at these levels.???

In the year 2020 the stocket has rallied 35 percent. however from the lockdown to till the stock has taken a completly U  turn from bottom to made a life time high of Rs.2369.35/share

Lets See how the chart of Reliance look's like:

The stock has fallen from Rs2300 to 2000 And currently trading above 150 SMA (1824)so based on the kind of results I am expecting the stock to give a good opening even in the last trading session too it bounces quite well.

The next resistance is expected at 2176 which is 50 days SMA.

According to me looking at the other factor and the US election and the trend the market is moving a strong profit booking can be seen at a higher level. So till the time, it doesn't move up the 50 SMA I prefer shorting the stock.

For investors, I would say to stay away as of now. With a high P/E value of 42 and a face value of 10, I am not totally convinced with the price. Stock and results are awesome but definitely not a  good level to buy, One can keep under the watchlist when corrects say around Rs 2000 can think of adding to their profile .. Rs1600 is the best level but I do not think the stock would come to these levels soon. So have some patience and wait for a little correction before investing.