State Bank Of India reports 0.48% almost no change in revenue in FY2018

22 May 2018 • About State Bank Of India ($SBID) • By InTwits

State Bank Of India reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:

State Bank Of India has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 4.6%.
CAPEX is quite volatile: ₹0m in FY2018, ₹44,237m in FY2017, ₹37,756m in FY2016, ₹34,523m in FY2015, ₹31,785m in FY2014
The company has unprofitable business model: ROIC is -1.7%
It operates with high leverage: Net Debt/EBITDA is 11.6x 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 showed almost no change in FY2018.

Net Income margin decreased slightly on 1.6 pp from 0.081% to -1.5% in FY2018. Net Income margin followed a declining trend at -2.2 pp per annum in the last 5 years.

Return on investment

The company operates at negative ROIC (-1.7%) and ROE (-2.0%). ROIC decreased slightly on 1.9 pp from 0.14% to -1.7% in FY2018. ROE decreased on 2.2 pp from 0.12% to -2.0% in FY2018. ROIC stuck to a declining trend at -1.9 pp per annum in FY2014-FY2018. ROE followed a declining trend at -3.6 pp per annum in the last 5 years.

Leverage (Debt)

Debt increased on 7.7% while cash decreased on 6.4%.

State Bank Of India has no short term refinancing risk: cash is higher than short term debt (565.1%).

Financial and operational results

FY ended 31 Mar 2018

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

mln. INR	2014	2015	2016	2017	2018	2018/2017
P&L
Revenue	2,260,683	2,579,526	2,731,402	2,969,185	2,983,502	0.5%
Net Income	141,738	169,943	122,246	2,412	-45,563	-1,988.8%
Balance Sheet
Cash	1,140,956	1,442,875	1,604,246	1,610,186	1,507,695	-6.4%
Short Term Debt	235,484	440,087	391,631	310,205	266,796	-14.0%
Long Term Debt	2,237,597	2,446,592	3,613,952	3,363,618	3,690,668	9.7%
Cash flow
Capex	31,785	34,523	37,756	44,237	0	-100.0%
Ratios
Revenue growth	12.2%	14.1%	5.9%	8.7%	0.5%

Net Income Margin	6.3%	6.6%	4.5%	0.1%	-1.5%	-1.6%
CAPEX, % of revenue	1.4%	1.3%	1.4%	1.5%	0.0%

ROIC	4.9%	5.5%	3.2%	0.1%	-1.7%	-1.9%
ROE	10.4%	11.0%	7.1%	0.1%	-2.0%	-2.2%

Peers in Banks

Below we provide State Bank Of India benchmarking against other companies in Banks industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %


Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Halyk Savings Bank Of Kazakhstn JSC ($HSBK)	16.3%	19.5%	16.4%	59.5%
Zenith Bank ($ZENB)		6.8%	17.9%	46.7%
Commercial Intl Bank(Egypt)S.A.E ($CBKD)	18.9%	26.8%	27.0%	46.4%
TCS Group Holding ($TCS)	11.5%	10.6%	34.0%	33.7%
Kazkommertsbank JSC ($KKB)	16.3%	41.4%	-1.4%	31.8%
Median (42 companies)	10.7%	3.5%	3.4%	4.2%	6.9%
State Bank Of India ($SBID)		14.1%	5.9%	8.7%	0.5%

Top companies by CAPEX/Revenue, %


Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Lloyds Banking Group ($LLPC)	13.1%	13.6%	14.5%	14.5%
Banco Santander Sa ($BNC)	8.9%	10.2%	9.1%	10.0%
Bcb Hldgs Ltd ($BCBW)	5.4%	2.5%	3.0%	7.3%
Royal Bank Of Scotland Group ($RBS)	4.1%	4.6%	5.6%	7.1%
Diamond Bank ($DBPA)	6.0%	6.7%	6.2%	7.0%
Median (38 companies)	2.1%	2.6%	2.5%	1.9%	1.2%
State Bank Of India ($SBID)	1.4%	1.3%	1.4%	1.5%	0.0%

Top companies by ROIC, %


Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
TCS Group Holding ($TCS)	6.7%	3.4%	22.5%	31.8%
Commercial Intl Bank(Egypt)S.A.E ($CBKD)	30.1%	30.3%	28.0%	25.3%
Guaranty Trust Bank ($GRTB)	17.8%	16.0%	17.4%	18.3%
Sberbank Of Russia ($SBER)	4.8%	4.0%	9.4%	13.0%
Zenith Bank ($ZENB)	15.0%	11.2%	11.1%	11.4%
Median (42 companies)	4.4%	3.4%	4.6%	4.7%	2.4%
State Bank Of India ($SBID)	4.9%	5.5%	3.2%	0.1%	-1.7%

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.