StateBankofIndia

Earningsinline;Assetqualitypainseemstohavepeakedout
PhillipCapital (India) Pvt. Ltd.
BANKING:QuarterlyUpdate
SBIQ2FY15reportedearningsatRs31bn,inlinewithmarketexpectation,evenasNII
atRs132.7bnwasmarginallybelowconsensusestimates.NIIgrewbyalower8.4%as
advancegrowthwasmoderateat9.8%yoyandNIMscontracted2bpsqoqto3.1%.
The stressed asset (slippage + fresh restructuring) formation continued to decline
from Rs169.5bn in Q2FY14 to Rs111.5bn in Q2FY15. The restructuring pipeline also
standsloweredtoRs30bn.

KeyhighlightsforQ2FY15
NII grew by 8.4% YoY to Rs 132.7bn below estimates as advances grew by a
moderate 9.7%yoy and NIM contracted by 2bps qoq to 3.1%. While Foreign
NIMs improved by 12bps qoq to 1.2%, domestic NIMs contracted by 5bps to
3.5%.DomesticLDRdroppedby221bpsqoqto71%,astherewaslackoflending
opportunities,leadingtodropinNIMs.
Advance growth was moderate at 9.8%yoy led by just 7.5%yoy growth in
domestic book, even as international book grew by 20%yoy. While large
corporateandretailbookgrewby17%yoy/11.2%yoy,SMEbookremainedflat
whereasmidcorporatebookdeclinedby3%yoy.
Otherincomegrewbyahealthy39%yoytoRs45.7bnaidedbyhigher
trading
gainsatRs4.5bn(91.7%yoy)andFxincomeatRs4.7bn(122%yoy).Feeincome
alsoreportedhealthygrowthof19%yoyowingtorevisioninservicecharges.
TotalstressassetadditionrunratereducedtoRs111.5bnfromRs135170bnin
earlierquarters.WhilefreshrestructuringwasstableatRs34.5bn,slippageswere
down to Rs77bn from Rs99.3bn in Q1. Slippages mainly came from MCG
(Rs40bn), SME (Rs17.6bn) and agri segments (Rs13.6bn). The net addition to
slippageswasloweratRs50.6bnVsRs53.8bninQ1FY15.
GNPA ratio for MCG/ Agri book continues to remain steep at 11.15%/ 10.34%
respectively. Restructuring pipeline is at Rs30bn. The bank received the first
installment of Rs5.3bn out of total four installments due from Telangana
governmentonaccountofagriwaive,whichwillreflectinQ3numbers.SBIhas
totalagriexposureofRs247bninerstwhileAndhraPradesh,whichqualifiedfor
farmwaiver.TherecoveryunderfarmloanwaiverschemetowardsNPAcanbe
aroundRs3040bninnext69months.

OutlookandValuation
Thecreditgrowthwillremainachallengeinshorttermasprojectpipelineseemto
becompletelyexhausted.NIMshavelimitedscopeforexpansiongivencompetitive
pressure.Freshstressformationhasbeendeclining,restructuringpipelinemoderate
andstressinlargecorporateundercontrol.Asperthemanagement,thestresshas
subsidedinlastfewquartersbutconcernsremainsinmidcorporateandSMEdueto
strained cash flow. We believe, the improvement in overall economic activity will
allaytheassetqualityconcernpertainingtomidcorporate.AtCMP,thebanktrades
at 1.3x FY16 core ABVPS of Rs1883 (Subsidiary value of Rs295 per share) vs its 10
year median valuation of 1.2x. The uptick in economic activity to improve the
operationalefficiencyandreducecreditcosttranslatingintoaearningsCAGRof24%
overFY1416andRoAimprovementof12to15bpsto0.8%inFY16.Moderationin
NPAandimprovementinearningsprofile,warrantpremiumvaluationovermedian
level.WemaintainBuywithrevisedTPofRs3120(implyingavaluationof1.5xFY16
ABVPS for banking business of Rs 1,883 and valuing nonbanking subsidiaries at Rs
295/share).
PleaserefertoDisclosuresandDisclaimersattheendoftheResearchReport.

14November2014

BUY
SBININ|CMPRS2788
TARGETRS3120(+12%)

CompanyData
O/SSHARES(MN):
MARKETCAP(RSBN):
MARKETCAP(USDBN):
52WKHI/LO(RS):
LIQUIDITY3M(USDMN):
FACEVALUE(RS):

747
1841
29.9
2835/1455
78.2
10

ShareHoldingPattern,%
PROMOTERS:
FII/NRI:
FI/MF:
NONPROMOTERCORP.HOLDINGS:
PUBLIC&OTHERS:

58.6
13.4
20.7
2.2
5.2

PricePerformance,%

1mth
3.8
0.6

ABS
RELTOBSE

3mth
4.2
7.1

1yr
52.0
25.6

PriceVs.Sensex(Rebasedvalues)
150

110

70

30
Apr11

Apr12
SBI

Apr13

Apr14

BSESensex

Source:PhillipCapitalIndiaResearch
OtherKeyRatios
Consolidated
FY14 FY15E FY16E
PreprovROE(%)
29.9
29.5
29.3
PreprovROA(%)
1.9
1.9
1.8
NetProfit(Rsbn)
142
172
215
%growth
20.9
21.0
25.6
EPS(Rs)
189.7 229.6 278.0
AdjBVPS(Rs)
1450.4 1625.8 1903.7
ROE(%)
10.1
10.8
12.0
P/E(x)
14.7
12.1
10.0
AdjP/BV(x)
1.9
1.7
1.5
Source:PhillipCapitalIndiaResearchEst.

ManishAgarwalla(+912266679962)
magarwalla@phillipcapital.in

PradeepAgrawal(+912266679953)
pagrawal@phillipcapital.in

PareshJain(+912266679948)
pjain@phillipcapital.in

14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAVISITNOTE

ResultUpdate(standalone)
(Rsbn)
Interestearned
Interestexpended
Netinterestincome
Noninterestincome
TotalIncome
Totaloperatingexpenses
Payrollcosts
Others
PreprovisionProfit
Provisions&Contingencies
%Operatingincome
PBT
ProvisionforTaxes
%ofPBT
NetProfit
Equity
EPS,Rs

Advances
Deposits
Advances/Deposits(%)
GrossNPAs
GrossNPAs(%)
NetNPAs
NetNPAs(%)
CARTierI
CARTierII
CARTotal

Q2FY15
Q2FY14 YoY growth
Q1FY15 QoQ growth
372.6
339.2
9.8
364.9
2.1
239.9
216.7
10.7
232.3
3.2
132.7
122.5
8.4
132.5
0.2
45.7
32.8
39.4
42.5
7.5
178.5
155.3
14.9
175.0
1.9
94.2
92.2
2.2
87.2
8.1
55.6
58.2
4.4
55.6
0.0
38.6
34.0
13.5
31.5
22.4
84.2
63.1
33.4
87.9
4.2
42.7
30.3
41.1
35.0
22.3
50.8
48.0
2.8
39.8
11.0
41.5
32.8
26.3
52.9
21.6
10.5
9.1
15.3
19.4
46.1
25.2
27.7
2.4
36.7
11.5
31.0
23.8
30.5
33.5
7.4
7.5
6.8
9.1
7.5
0.0
41.5
34.7
19.6
44.9
7.4

12,096.5
11,030.9
9.7
11,989.0
0.9
14,737.8
12,924.6
14.0
14,189.2
3.9
82.1
85.3
3.3
84.5
2.4
607.1
642.1
5.4
604.3
0.5
4.9
5.6
0.8
4.9
0.0
330.0
321.5
2.6
318.8
3.5
2.7
2.9
0.2
2.7
0.1
9.6
8.7
0.9
9.6
0.0
2.7
3.0
0.2
2.9
0.2
12.3
11.7
0.6
12.6
0.2

Source:Company,PhillipCapitalIndiaResearch

ResultUpdate(Consolidated)
(Rsbn)
InterestIncome
InterestExpense
Netinterestincome
Noninterestincome
TotalIncome
Totaloperatingexpenses
PreprovisionProfit
Provisions&Contingencies
%Operatingincome
PBT
ProvisionforTaxes
%ofPBT
NetProfit
Equity
EPS,Rs

Q2FY15
513.3
330.8
182.5
97.7
280.1
168.5
111.6
56.6
50.7
55.0
13.8
25.0
41.2
7.5
55.2

Q2FY14
469.5
301.9
167.6
61.7
229.3
143.1
86.2
44.0
51.1
42.1
10.3
24.3
31.9
6.8
46.6

Advances
Deposits
Advances/Deposits(%)
GrossNPAs
GrossNPAs(%)
Net NPAs
NetNPAs(%)
CARTierI
CARTierII
CARTotal

15,773.4
19,262.2
81.9
809.5
5.0
446.5
2.8
9.4
2.8
12.1

14,548.0
17,314.1
84.0
815.5
5.4
420.8
2.9
8.3
2.7
10.9

Source:Company,PhillipCapitalIndiaResearch

2of8

YoYGrowth
9.3
9.6
8.9
58.2
22.2
17.7
29.5
28.6
0.4
30.5
34.2
0.7
29.3
9.1
18.5

8.4
11.3
2.1
0.7
0.4
6.1
0.1
1.1
0.1
1.2

Q1FY15
500.4
320.2
180.2
105.8
286.0
170.6
115.4
45.5
39.5
69.9
24.0
34.4
45.9
7.5
61.5

QoQGrowth
2.6
3.3
1.3
7.7
2.1
1.2
3.3
24.3
11.3
21.3
42.7
9.3
10.1
0.0
10.1

15,642.0
18,723.0
83.5
790.1
4.9
422.5
2.7
9.4
2.7
12.1

0.8
2.9
1.7
2.5
0.1
5.7
0.1
0.1
0.1
0.0

14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAVISITNOTE

SumoftheParts

Ownership Value/share
Comment
SBIandITSbankingsubsidiaries
2825
1.5XFY16EABVPSOFRS1883
SBILife
74.00%
178
15timesFY16ENBAPofRs5bn+EVofRS87bn
SBIcards
60.00%
7
15timesFY16EPATRs5.4bn
SBIFundMgt.
63.00%
35
5%ofFY16EAUMofRs866bn
SBIGeneralInsurance
74.00%
1
1timesFY16EbookvalueofRs1.2bn
100.00%
73
15timesFY16EPATofRs3.8bn
SBICaps
FairValue
3120

Source:Company,PhillipCapitalIndiaResearch

3of8

14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAVISITNOTE

Financials(Standalone)

ValuationRatios

IncomeStatement
Y/EMar,Rsbn

FY13

FY14

FY15E

FY16E

InterestonLoans

905

1,025

1,165

1,334

EarningsandValuationRatios

InterestonInvestments

277

324

356

395

14

15

17

20

1,197

1,364

1,539

1,749

TotalInterestExpended

753

871

976

NetInterestIncome

443

493

Totalnoninterestincome

160

TotalIncome

604

PersonnelExpenses
OtherExpenses

FY13

FY14

FY15E

FY16E

PreprovisionOperatingRoAE(%)

34.0

29.6

29.6

30.0

RoAE(%)

15.4

10.0

10.7

12.1

PreprovisionOperatingROA(%)

2.1

1.9

1.9

1.9

1,102

RoAB(%)

1.0

0.7

0.7

0.8

563

647

EPS(Rs.)

206

146

177

217

186

193

209

Dividendpershare(Rs.)

42

30

34

40

678

755

856

BookValue(Rs.)

1,446

1,584

1,722

1,933

184

225

243

272

AdjBV(Rs.)

1,164

1,172

1,290

1,521

109

132

147

166

TotalOpexpenses

293

357

390

438

RevenueAnalysis

NetInc(Loss)beforeprov

311

321

365

418

InterestincomeonIBA(%)

8.5

8.3

8.1

8.0

ProvisionforNPAs

121

154

169

166

InterestcostonIBL(%)

5.9

5.8

5.7

5.5

ProvisionforInvstdeprn

10

NIMonIBA/AWF(%)

3.2

3.0

3.0

2.9

NetInc(Loss)beforetax

200

162

197

251

CorefeeInc/AWF(%)

0.9

0.9

0.8

0.8

ProvisionforIncomeTax

58

53

65

83

Portfoliogains/TotalInc(%)

1.8

3.1

1.3

1.1

141

109

132

168

49.4

54.3

52.3

51.8

Others
TotalInterestEarned

NetProfit

BalanceSheet
Y/EMar,Rsbn

Op.Exp/AWF(%)

FY13

FY14

FY15E

Assets
Cash&BalwithRBI
Loans,Adv&Intaccrued
Investments
FixedAssets(Net)

FY16E

1,148

1,325

1,458

1,651

10,456

12,098

14,096

16,495

3,630

4,122

4,734

5,488

70

80

88

95

Otherassets

358

296

335

342

TotalAssets

15,662

17,922

20,710

24,071

Liabilities

982

1,175

1,278

1,489

56

59

66

74

347

367

382

402

1,290

1,405

1,687

2,024

12,161

14,102

16,371

19,063

821

806

919

1,011

15,662

17,922

20,710

24,071

Sharecapital
ReservesandSurplus
HybridCapital
Debt
Borrowing
TotalDeposits
Otherliabincldprov
TotalLiabilities

Op.Exp/TI(%)

Source:Company,PhillipCapitalIndiaResearch

2.1

2.2

2.1

2.0

Employeeexps/Opexps(%)

62.8

63.0

62.3

62.1

Tax/Pretaxearnings(%)

29.3

32.7

33.0

33.0

AssetQuality

GNPAs/GrAdv(%)

4.76

4.97

4.63

4.11

NNPAs/NetAdv(%)

2.16

2.64

2.41

2.02

GrowthRatio

Loans(%)

20.5

15.7

16.5

17.0

Investments(%)

12.3

13.6

14.8

15.9

Deposits(%)

15.3

16.0

16.1

16.4

Networth(%)

17.8

19.6

8.7

16.5

2.4

11.2

14.2

15.0

Nonfundbasedincome(%)

(5.0)

9.8

10.0

12.0

NonIntExp(%)

12.3

22.0

9.2

12.4

7.9

(18.9)

21.9

27.3

20.5

(22.8)

21.3

27.3

Asset/LiabilityProfile

AvgCASA/Deposits(%)

44.3

43.3

42.5

42.7

AvgAdv/AvgDep(%)

80.3

81.6

81.7

82.5

AvgInvst/AvgDep(%)

30.2

29.5

29.1

28.8

IncrAdv/Deposits(%)

110.1

84.6

88.0

89.1

9.3

9.4

9.1

8.8

12.9

12.4

11.6

11.4

NetIntIncome(%)

ProfitBeforeTax(%)
Netprofit(%)

AvgCash/AvgDep(%)

CapitalAdequacyRatio:
TierI(%)

9.5

9.7

9.2

9.2

InternalCapitalGenerationrate(%)

13.4

8.7

9.0

10.7

NNPAstoEquity(%)

22.2

26.3

25.8

21.8

4of8

14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAQUARTERLYUPDATE

Financials(Consolidated)

ValuationRatios

IncomeStatement
Y/EMar,Rsbn

FY13

FY14

FY15E

FY16E

InterestonLoans

1264

1414

1608

1853

387

449

484

533

28

28

32

38

TotalInterestEarned

1680

1891

2124

2424

PreprovisionOperatingROA(%)

TotalInterestExpended

1068

1215

1366

1558

NetInterestIncome

612

676

758

Totalnoninterestincome

326

379

TotalIncome

937

1055

PersonnelExpenses

244

299

323

OtherExpenses

284

335

369

TotalOpexpenses

528

634

NetInc(Loss)beforeprov

409

ProvisionforNPAs

154

ProvisionforInvstdeprn

InterestonInvestments
Others

EarningsandValuationRatios

FY13

FY14

FY15E

FY16E

PreprovisionOperatingRoAE(%)

34.2

29.9

29.5

29.3

RoAE(%)

15.0

10.1

10.8

12.0

2.1

1.9

1.8

1.8

RoAB(%)

0.93

0.6

0.7

0.7

866

EPS(Rs.)

261.9

189.7

229.6

278.0

403

436

Dividendpershare(Rs.)

41.5

30.0

34.0

40.0

1162

1302

BookValue(Rs.)

1,890.1 2,038.6 2,233.5 2,493.4

361

AdjBV(Rs.)

1,495.0 1,450.4 1,625.8 1,903.7

413

691

774

RevenueAnalysis

421

470

528

199

206

198

NetInc(Loss)beforetax

259

213

ProvisionforIncomeTax

76
179

NetProfit

1,446

1,455

1,619

1,892

InterestincomeonIBA(%)

8.7

8.6

8.5

8.3

InterestcostonIBL(%)

6.2

6.2

6.1

5.9

NIMonIBA/AWF(%)

3.2

3.1

3.0

3.0

262

329

CorefeeInc/AWF(%)

0.8

0.8

0.8

0.8

68

86

108

Portfoliogains/TotalInc(%)

3.1

3.4

2.7

2.4

142

172

215

Op.Exp/TI(%)

58.1

62.1

61.1

60.9

BalanceSheet
Y/EMar,Rsbn
Assets
Cash&BalwithRBI

Op.Exp/AWF(%)

FY13

FY14

FY15E

FY16E

1452

1672

1872

2135

Loans,&Adv

13926

15783

18541

21743

Investments

5361

5788

6476

7355

94

106

111

116

FixedAssets(Net)
Otherassets

498

612

636

662

TotalAssets

21,332

23,960

27,636

32,012

Liabilities

1243

1466

1608

1867

73

80

88

97

451

518

591

680

1514

1639

1901

2187

16452

18570

21688

25474

1550

1630

1699

1642

21,332

23,960

27,636

32,012

Sharecapital
ReservesandSurplus
HybridCapital
Debt
Borrowing
TotalDeposits
Otherliabincldprov
TotalLiabilities

Source:Company,PhillipCapitalIndiaResearch

2.8

2.9

2.8

2.7

Employeeexps/Opexps(%)

46.2

47.1

46.7

46.7

Tax/Pretaxearnings(%)

29.2

32.1

33.0

33.0

AssetQuality

GNPAs/GrAdv(%)

4.6

5.1

4.8

4.4

NNPAs/NetAdv(%)

2.1

2.7

2.4

2.1

GrowthRatio

Loans(%)

19.7

13.3

17.5

17.3

Investments(%)

12.6

8.0

11.9

13.6

Deposits(%)

15.1

12.9

16.8

17.5

Networth(%)

17.6

17.8

9.6

15.8

5.7

10.5

12.2

14.2

Nonfundbasedincome(%)

(4.6)

13.1

10.0

12.0

NonIntExp(%)

12.7

20.0

9.1

12.0

5.8

(17.6)

22.7

25.6

16.8

(20.9)

21.0

25.6

Asset/LiabilityProfile

AvgCASA/Deposits(%)

40.3

40.5

40.7

40.5

AvgAdv/AvgDep(%)

79.4

80.7

81.1

81.5

AvgInvst/AvgDep(%)

32.9

31.8

30.5

29.3

IncrAdv/Deposits(%)

106.3

87.7

88.5

84.6

8.9

8.9

8.8

8.5

12.8

12.4

12.8

12.8

NetIntIncome(%)

ProfitBeforeTax(%)
Netprofit(%)

AvgCash/AvgDep(%)

CapitalAdequacyRatio:
TierI(%)

9.5

9.7

9.4

9.4

InternalCapitalGenerationrate(%)

14.2

9.5

9.9

11.4

NNPAstoEquity(%)

22.3

27.5

26.3

22.9

5of8

14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAQUARTERLYUPDATE

RecommendationChart
3500
3000

N(TP2983)

S(TP2360)
B(TP2570)

2500
2000

B(TP2971)
B(TP2530

N(TP2380)

S(TP1780)

N(TP2650)

1500

B(TP2530)
N(TP2200)

B(TP1900)

B(TP2570) B(TP2365)
B(TP1856)

B(TP1700)

1000
1/3/2011

8/8/2011

3/16/2012

Source:PhillipCapitalIndiaResearch

6of8

10/19/2012

5/29/2013

1/3/2014

8/12/2014

14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAQUARTERLYUPDATE

Management
VineetBhatnagar(ManagingDirector)
JigneshShah(HeadEquityDerivatives)

(9122)23002999
(9122)66679735

Research
Automobiles
DhawalDoshi
PriyaRanjan
Banking,NBFCs
ManishAgarwalla
PradeepAgrawal
PareshJain

(9122)66679769
(9122)66679965

(9122)66679962
(9122)66679953
(9122)66679948

Consumer,Media,Telecom
NaveenKulkarni,CFA,FRM (9122)66679947
VivekanandSubbaraman
(9122)66679766
ManishPushkar,CFA
(9122)66679764
Cement
VaibhavAgarwal
Economics
AnjaliVerma

(9122)66679967

Engineering,CapitalGoods
AnkurSharma
(9122)66679759
HrishikeshBhagat
(9122)66679986
Infrastructure&ITServices
VibhorSinghal
(9122)66679949
VarunVijayan
(9122)66679992
Midcap
VikramSuryavanshi
Metals
DhawalDoshi

(9122)66679768

Retail,RealEstate
AbhishekRanganathan,CFA (9122)66679952
NehaGarg
(9122)66679996
Technicals
SubodhGupta,CMT

(9122)66679762

ProductionManager
GaneshDeorukhkar

(9122)66679966

DatabaseManager
VishalRandive

(9122)66679944

(9122)66679951

(9122)66679769

Oil&Gas,AgriInputs
GauriAnand
DeepakPareek

(9122)66679943
(9122)66679950

Sr.ManagerEquitiesSupport
RosieFerns
(9122)66679971

(9122)66679969

Sales&Distribution
KinshukBhartiTiwari
AshvinPatil
ShubhangiAgrawal
KishorBinwal
SidharthAgrawal
BhavinShah

Pharma
SuryaPatra

CorporateCommunications
(9122)66679946
(9122)66679991
(9122)66679964
(9122)66679989
(9122)66679934
(9122)66679974

DipeshSohani
SalesTrader
DileshDoshi
SuniilPandit
Execution
MayurShah

(9122)66679756

ZarineDamania

(9122)66679976

(9122)66679747
(9122)66679745
(9122)66679945

SINGAPORE
PhillipSecuritiesPteLtd
250NorthBridgeRoad,#0600RafflesCityTower,
Singapore179101
Tel:(65)65336001Fax:(65)65353834
www.phillip.com.sg

ContactInformation(RegionalMemberCompanies)

MALAYSIA
PhillipCapitalManagementSdnBhd
B36BlockBLevel3,MeganAvenueII,
No.12,JalanYapKwanSeng,50450KualaLumpur
Tel(60)321628841Fax(60)321665099
www.poems.com.my

HONGKONG
PhillipSecurities(HK)Ltd
11/FUnitedCentre95QueenswayHongKong
Tel(852)22776600Fax:(852)28685307
www.phillip.com.hk

JAPAN
PhillipSecuritiesJapan,Ltd
42NihonbashiKabutocho,Chuoku
Tokyo1030026
Tel:(81)336662101Fax:(81)336640141
www.phillip.co.jp

INDONESIA
PTPhillipSecuritiesIndonesia
ANZTowerLevel23B,JlJendSudirmanKav33A,
Jakarta10220,Indonesia
Tel(62)2157900800Fax:(62)2157900809
www.phillip.co.id

CHINA
PhillipFinancialAdvisory(Shanghai)Co.Ltd.
No550YanAnEastRoad,OceanTowerUnit2318
Shanghai200001
Tel(86)2151699200Fax:(86)2163512940
www.phillip.com.cn

THAILAND
PhillipSecurities(Thailand)PublicCo.Ltd.
15thFloor,VorawatBuilding,849SilomRoad,
Silom,Bangrak,Bangkok10500Thailand
Tel(66)222680999Fax:(66)222680921
www.phillip.co.th

FRANCE
King&ShaxsonCapitalLtd.
3rdFloor,35RuedelaBienfaisance
75008ParisFrance
Tel(33)145633100Fax:(33)145636017
www.kingandshaxson.com

UNITEDKINGDOM
King&ShaxsonLtd.
6thFloor,CandlewickHouse,120CannonStreet
London,EC4N6AS
Tel(44)2079295300Fax:(44)2072836835
www.kingandshaxson.com

UNITEDSTATES
PhillipFuturesInc.
141WJacksonBlvdSte3050
TheChicagoBoardofTradeBuilding
Chicago,IL60604USA
Tel(1)3123569000Fax:(1)3123569005

AUSTRALIA
PhillipCapitalAustralia
Level37,530CollinsStreet
Melbourne,Victoria3000,Australia
Tel:(61)396298380Fax:(61)396148309
www.phillipcapital.com.au

SRILANKA
AshaPhillipSecuritiesLimited
Level4,MillenniumHouse,46/58NavamMawatha,
Colombo2,SriLanka
Tel:(94)112429100Fax:(94)112429199
www.ashaphillip.net/home.htm

INDIA
PhillipCapital(India)PrivateLimited
No.1,18thFloor,UrmiEstate,95GanpatraoKadamMarg,LowerParelWest,Mumbai400013
Tel:(9122)23002999Fax:(9122)66679955www.phillipcapital.in

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14November2014/INDIAEQUITYRESEARCH/STATEBANKOFINDIAQUARTERLYUPDATE

DisclosuresandDisclaimers

PhillipCapital(India)Pvt.Ltd.hasthreeindependentequityresearchgroups:InstitutionalEquities,InstitutionalEquityDerivativesandPrivateClientGroup.Thisreporthasbeenpreparedby
InstitutionalEquitiesGroup.Theviewsandopinionsexpressedinthisdocumentmayormaynotmatchormaybecontraryattimeswiththeviews,estimates,rating,targetpriceofthe
otherequityresearchgroupsofPhillipCapital(India)Pvt.Ltd.

ThisreportisissuedbyPhillipCapital(India)Pvt.Ltd.whichisregulatedbySEBI.PhillipCapital(India)Pvt.Ltd.isasubsidiaryofPhillip(Mauritius)Pvt.Ltd.Referencesto"PCIPL"inthisreport
shallmeanPhillipCapital(India)Pvt.Ltdunlessotherwisestated.ThisreportispreparedanddistributedbyPCIPLforinformationpurposesonlyandneithertheinformationcontainedherein
nor any opinion expressed should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment or
derivatives.TheinformationandopinionscontainedintheReportwereconsideredbyPCIPLtobevalidwhenpublished.ThereportalsocontainsinformationprovidedtoPCIPLbythird
parties.Thesourceofsuchinformationwillusuallybedisclosedinthereport.WhilstPCIPLhastakenallreasonablestepstoensurethatthisinformationiscorrect,PCIPLdoesnotofferany
warrantyastotheaccuracyorcompletenessofsuchinformation.AnypersonplacingrelianceonthereporttoundertaketradingdoessoentirelyathisorherownriskandPCIPLdoesnot
acceptanyliabilityasaresult.SecuritiesandDerivativesmarketsmaybesubjecttorapidandunexpectedpricemovementsandpastperformanceisnotnecessarilyanindicationtofuture
performance.

This report does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors must
undertakeindependentanalysiswiththeirownlegal,taxandfinancialadvisorsandreachtheirownregardingtheappropriatenessofinvestinginanysecuritiesorinvestmentstrategies
discussedorrecommendedinthisreportandshouldunderstandthatstatementsregardingfutureprospectsmaynotberealized.Innocircumstancesitbeusedorconsideredasanofferto
sellorasolicitationofanyoffertobuyorselltheSecuritiesmentionedinit.Theinformationcontainedintheresearchreportsmayhavebeentakenfromtradeandstatisticalservicesand
othersources,whichwebelievearereliable.PhillipCapital(India)Pvt.Ltd.oranyofitsgroup/associate/affiliatecompaniesdonotguaranteethatsuchinformationisaccurateorcomplete
anditshouldnotberelieduponassuch.Anyopinionsexpressedreflectjudgmentsatthisdateandaresubjecttochangewithoutnotice

Important:Thesedisclosuresanddisclaimersmustbereadinconjunctionwiththeresearchreportofwhichitformspart.Receiptanduseoftheresearchreportissubjecttoallaspectsof
thesedisclosuresanddisclaimers.Additionalinformationabouttheissuersandsecuritiesdiscussedinthisresearchreportisavailableonrequest.

Certifications:Theresearchanalyst(s)whopreparedthisresearchreportherebycertifiesthattheviewsexpressedinthisresearchreportaccuratelyreflecttheresearchanalystspersonal
viewsaboutallofthesubjectissuersand/orsecurities,thattheanalysthavenoknownconflictofinterestandnopartoftheresearchanalystscompensationwas,isorwillbe,directlyor
indirectly,relatedtothespecificviewsorrecommendationscontainedinthisresearchreport.TheResearchAnalystcertifiesthathe/sheorhis/herfamilymembersdoesnotownthe
stock(s)coveredinthisresearchreport.

Independence/Conflict:PhillipCapital(India)Pvt.Ltd.hasnothadaninvestmentbankingrelationshipwith,andhasnotreceivedanycompensationforinvestmentbankingservicesfrom,the
subjectissuersinthepasttwelve(12)months,andPhillipCapital(India)Pvt.Ltddoesnotanticipatereceivingorintendtoseekcompensationforinvestmentbankingservicesfromthe
subjectissuersinthenextthree(3)months.PhillipCapital(India)Pvt.Ltdisnotamarketmakerinthesecuritiesmentionedinthisresearchreport,althoughitoritsemployees,directors,or
affiliatesmayholdeitherlongorshortpositionsinsuchsecurities.PhillipCapital(India)Pvt.Ltdmaynotholdmorethan1%ofthesharesofthecompany(ies)coveredinthisreport.

SuitabilityandRisks:Thisresearchreportisforinformationalpurposesonlyandisnottailoredtothespecificinvestmentobjectives,financialsituationorparticularrequirementsofany
individual recipient hereof. Certain securities may give rise to substantial risks and may not be suitable for certain investors. Each investor must make its own determination as to the
appropriatenessofanysecuritiesreferredtointhisresearchreportbaseduponthelegal,taxandaccountingconsiderationsapplicabletosuchinvestoranditsowninvestmentobjectivesor
strategy,itsfinancialsituationanditsinvestingexperience.Thevalueofanysecuritymaybepositivelyoradverselyaffectedbychangesinforeignexchangeorinterestrates,aswellasby
otherfinancial,economicorpoliticalfactors.Pastperformanceisnotnecessarilyindicativeoffutureperformanceorresults.

Sources,CompletenessandAccuracy:ThematerialhereinisbaseduponinformationobtainedfromsourcesthatPCIPLandtheresearchanalystbelievetobereliable,butneitherPCIPLnor
theresearchanalystrepresentsorguaranteesthattheinformationcontainedhereinisaccurateorcompleteanditshouldnotberelieduponassuch.Opinionsexpressedhereinarecurrent
opinionsasofthedateappearingonthismaterialandaresubjecttochangewithoutnotice.Furthermore,PCIPLisundernoobligationtoupdateorkeeptheinformationcurrent.

Copyright:ThecopyrightinthisresearchreportbelongsexclusivelytoPCIPL.Allrightsarereserved.Anyunauthorizeduseordisclosureisprohibited.Noreprintingorreproduction,inwhole
orinpart,ispermittedwithoutthePCIPLspriorconsent,exceptthatarecipientmayreprintitforinternalcirculationonlyandonlyifitisreprintedinitsentirety.

Caution:Riskoflossintradingincanbesubstantial.Youshouldcarefullyconsiderwhethertradingisappropriateforyouinlightofyourexperience,objectives,financialresourcesandother
relevantcircumstances.

ForU.S.personsonly:ThisresearchreportisaproductofPhillipCapital(India)PvtLtd.whichistheemployeroftheresearchanalyst(s)whohaspreparedtheresearchreport.Theresearch
analyst(s)preparingtheresearchreportis/areresidentoutsidetheUnitedStates(U.S.)andarenotassociatedpersonsofanyU.S.regulatedbrokerdealerandthereforetheanalyst(s)is/are
not subject to supervision by a U.S. brokerdealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or
regulationsregarding,amongotherthings,communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

ThisreportisintendedfordistributionbyPhillipCapital(India)PvtLtd.onlyto"MajorInstitutionalInvestors"asdefinedbyRule15a6(b)(4)oftheU.S.SecuritiesandExchangeAct,1934(the
ExchangeAct)andinterpretationsthereofbyU.S.SecuritiesandExchangeCommission(SEC)inrelianceonRule15a6(a)(2).IftherecipientofthisreportisnotaMajorInstitutionalInvestor
asspecifiedabove,thenitshouldnotactuponthisreportandreturnthesametothesender.Further,thisreportmaynotbecopied,duplicatedand/ortransmittedonwardtoanyU.S.
person,whichisnottheMajorInstitutionalInvestor.

In reliance on the exemption from registration provided by Rule 15a6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major
InstitutionalInvestors,PhillipCapital(India)PvtLtd.hasenteredintoanagreementwithaU.S.registeredbrokerdealer,MarcoPoloSecuritiesInc.("MarcoPolo").Transactionsinsecurities
discussedinthisresearchreportshouldbeeffectedthroughMarcoPolooranotherU.S.registeredbrokerdealer.

PhillipCapital(India)Pvt.Ltd.
Registeredoffice:No.1,18thFloor,UrmiEstate,95GanpatraoKadamMarg,LowerParelWest,Mumbai400013

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