We expect NIM trajectory to sustain with repricing of lending book offsetting any deposit cost rise. Credit growth of 18% / 16%, stable NIMs, operating profit growth of 22% / 19% and credit cost of 0.8% / 0.9% will drive RoE to 18%/ 17% by FY23E/FY24E, respectively. This will help SBI command 1.7x FY24E core banking business book (earlier 1.5x Sep’23E). We revise our SoTPbased target price to Rs 805 (earlier: Rs 673)

We estimate our specialty chemical coverage universe revenue to grow 19.3% YoY (down 0.6% QoQ) in Q2FY23, partly on rise in prices due to input cost inflation. Gross profit to grow 22.7% YoY (down 1.4% QoQ, largely due to seasonality), which indicates strong underlying trend led by our expectation of 1) SRF’s robust growth (36.7% YoY) on continuous good show in ref-gas, offset by weakness in non-chemicals business

HAL has hired BCG for consultation to identify areas of potential diversification, business strategy, internal restructuring and improving operational efficiency. Some of the areas of diversification are civil MRO, passenger-to-freight conversion of aircraft, UAV simulators, etc. for capturing additional revenues.

Under the leadership of new MD & CEO, Mr. K. Swaminathan, growth strategy seems to be delivering the right results. Company’s business franchise is currently undervalued – the stock trades below its FY23E book and at 3.4x FY23E earnings, and is available at <0.1x AUM. Maintain BUY with an unchanged target price of Rs470, assigning 1.1x Sep’23E book value

We continue to like CPBI for its strong growth prospects, high return ratios and healthy balance sheet and believe it will be a major beneficiary of the uptick in housing demand and higher spend on home improvement post the pandemic. Maintain estimates and Mar’23E target price of Rs747, set at unchanged 35x PER FY24E

Growth runway is huge; potentially add HDFC Bank every five years. Proposed merger adds an entirely different dimension to the future. There may not be any need to raise further funds to meet reserve requirements. Plans to nearly double its network in next 3-5 years by opening 1,500 to 2,000 branches every year. 4) Bank will continue to invest in modern technology and talent.

We re-iterate our underweight stance on the Indian IT services and believe deployment in the sector should be very slow and gradual as we believe there would be many unknown risks (normalisation of tech spend, downside risk on FY24 revenue growth etc.) ahead, which might further degrade valuations. We suggest investor to stick with TCS in large cap; Coforge in mid cap.

SBI has set new standard in banking excellence: SBI exited FY22 with 13.9% RoE and 0.67% RoA aided by growth build-up, GNPAs at a decadal low, slippages at <1%, credit cost at 55bps and steady margin profile. Improved visibility on asset quality with ‘new normal’ credit cost of 1%, credit growth of 13%/15% for FY23E/FY24E, asset resolution and stable NIMs will drive RoE to >16% by FY23E/FY24E and valuations to 1.5x Sep’23E book. Maintain BUY with an unchanged target price of Rs673.

Sustainable strong growth play