State Bank Of India reports 8.7% revenue growth in FY2017

19-05-2017 • About State Bank Of India ($SBIN) • By InTwits

State Bank Of India reported FY2017 financial results today. Here are the key drivers of the company's long term financial model:

State Bank Of India is a growth stock: FY2017 revenue growth was 8.7%, 5 year revenue CAGR was 11.0% at FY2017 ROIC 0.14%
State Bank Of India has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 1.6%
The company has potentially unprofitable business model: ROIC is 0.1%
It operates with high leverage: Net Debt/EBITDA is 4.2x while industry average is

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

State Bank Of India's Revenue increased on 8.7%.

Net Income margin decreased on 4.4 pp from 4.5% to 0.081% in FY2017. Net Income margin followed a declining trend at -1.9 pp per annum in FY2013-FY2017.

Investments (CAPEX, working capital and M&A)

The company's CAPEX/Revenue was 1.5% in FY2017. CAPEX/Revenue showed almost no change from FY2014 to FY2017. Average CAPEX/Revenue for the last three years was 1.4%. During FY2013-FY2017 CAPEX as a % of Revenue bottomed in FY2015 at 1.3% and was growing since that time.

Return on investment

The company operates at low ROIC (0.1%) and ROE (0.1%). ROIC decreased on 3.1 pp from 3.2% to 0.14% in FY2017. ROE decreased on 7.0 pp from 7.1% to 0.12% in FY2017. ROIC followed a declining trend at -1.5 pp per annum in FY2013-FY2017. ROE followed a declining trend at -3.4 pp per annum in the last 5 years.

Leverage (Debt)

Debt decreased on 8.3% while cash showed almost no change in FY2017.

State Bank Of India has no short term refinancing risk: cash is higher than short term debt (519.1%).

Financial and operational results

FY ended 31-03-2017

State Bank Of India ($SBIN) key annual financial indicators

mln. INR	2013	2014	2015	2016	2017	2017/2016
P&L
Revenue	2,015,100	2,260,683	2,579,526	2,731,402	2,969,185	8.7%
Net Income	179,162	141,738	169,943	122,246	2,412	-98.0%
Balance Sheet
Cash	895,740	1,140,956	1,442,875	1,604,246	1,610,186	0.4%
Short Term Debt	619,556	235,484	440,087	391,631	310,205	-20.8%
Long Term Debt	2,037,200	2,237,597	2,446,592	3,613,952	3,363,618	-6.9%
Cash flow
Capex	35,714	31,785	34,523	37,756	44,237	17.2%
Ratios
Revenue growth	14.5%	12.2%	14.1%	5.9%	8.7%

Net Income Margin	8.9%	6.3%	6.6%	4.5%	0.1%	-4.4%
CAPEX, % of revenue	1.8%	1.4%	1.3%	1.4%	1.5%	0.1%

ROIC	6.7%	4.9%	5.5%	3.2%	0.1%	-3.1%
ROE	15.5%	10.4%	11.0%	7.1%	0.1%	-7.0%

Peers in Banks

Below you can find State Bank Of India benchmarking vs. other companies in Banks industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2013	FY2014	FY2015	FY2016	FY2017
Kotak Mahindra Bank ($KOTAKBANK)	22.9%	7.1%	26.1%	29.2%	-
Dcb Bank ($DCBBANK)	26.2%	22.5%	25.3%	20.8%	-
Yes Bank ($YESBANK)	33.7%	21.6%	17.7%	18.9%	-
Axis Bank ($AXISBANK)	-	13.1%	15.6%	14.9%	12.3%
Lakshmi Vilas Bank ($LAKSHVILAS)	16.7%	11.7%	14.2%	14.6%	-
Median (28 companies)	16.7%	10.6%	10.2%	2.0%	12.3%
State Bank Of India ($SBIN)	-	12.2%	14.1%	5.9%	8.7%

Top companies by CAPEX/Revenue, %


Top 5	FY2013	FY2014	FY2015	FY2016	FY2017
Indian Overseas Bank ($IOB)	1.0%	0.9%	0.6%	4.8%	-
Union Bank Of India ($UNIONBANK)	1.3%	1.2%	1.0%	4.4%	-
Indian Bank ($INDIANB)	1.3%	1.0%	1.4%	4.3%	-
Axis Bank ($AXISBANK)	1.4%	1.6%	1.2%	2.9%	1.3%
Lakshmi Vilas Bank ($LAKSHVILAS)	1.4%	1.6%	2.4%	2.4%	-
Median (28 companies)	1.2%	1.2%	1.3%	1.2%	1.0%
State Bank Of India ($SBIN)	1.8%	1.4%	1.3%	1.4%	1.5%

Top companies by ROIC, %


Top 5	FY2013	FY2014	FY2015	FY2016	FY2017
Karur Vysya Bank ($KARURVYSYA)	11.0%	5.3%	5.7%	12.4%	-
Karnataka Bank ($KTKBANK)	10.2%	7.7%	10.4%	10.1%	-
Yes Bank ($YESBANK)	8.4%	8.4%	8.7%	9.0%	-
Axis Bank ($AXISBANK)	8.9%	9.1%	8.8%	7.6%	3.1%
Kotak Mahindra Bank ($KOTAKBANK)	6.5%	7.1%	8.5%	7.3%	-
Median (28 companies)	6.1%	3.2%	4.2%	3.9%	3.1%
State Bank Of India ($SBIN)	6.7%	4.9%	5.5%	3.2%	0.1%

State Bank Of India stock price chart

State Bank Of India financials

mln.	FY2010	FY2011	FY2012

Revenue	1,349,925	1,468,596	1,760,138
EBITDA	0.000	0.000	0.000
Net income	117,338	106,849	153,431
CAPEX	21,219	18,742	23,398
Debt	1,776,381	1,942,077	2,093,349
Cash	821,956	1,193,498	791,992

About State Bank Of India

State Bank of India provides various banking products and services in India and internationally. It offers personal banking products and services, including current accounts, savings accounts, term deposits, and capital gain schemes; housing, car, property, educational, personal, festival, career, scholar, and gold loans, as well as loans for pensioners and loans against shares/debentures; and mobile and Internet banking, demat, ATM, foreign inward remittance, safe deposit locker, public provident fund, multi-city cheques, money transfer, and mobile wallet services, as well as cards and inflation indexed national savings securities-cumulative bonds. The company also provides corporate banking services comprising corporate accounts, working capital and project finance, deferred payment guarantees, corporate term loans, structured finance, dealer and channel financing, equipment leasing, loan syndication, construction equipment loans, financing Indian firms overseas subsidiaries or JVs, and cash management products; products for NRIs, including accounts and deposits, loans, remittances, and investments; agricultural banking and micro credit to agriculturists and landless agricultural laborers; and current accounts, deposits, transaction banking, asset backed loans, fleet finance schemes, and collateral free loans for SME customers. In addition, it offers international banking products and services; broking, bill payment, and online railway ticket booking; and credit cards, life and general insurance, mutual funds, factoring, security trading, pension fund management, and custodial services, as well as primary dealership services in the money market. The company operates through 21,977 branches, including 6,108 branches of its 5 associate banks; and 51,491 ATMs. State Bank of India was founded in 1806 and is based in Mumbai, India.