What is your take on what SBIs numbers are and is there a case for rerating in the stock irrespective of the steady move that we have seen ever since ICICI Bank reported its numbers?
The numbers in terms of asset quality has been stable. That is a key thing to look into in these corporate lenders. If this remains constant, I do not think there should be any negative from here on the SBI front. Looking at corporate bankers, we can say that at least we are at the peak of the NPA cycle.
Going forward, we do not see anything that could be a disaster or which would come into existence that has been unnoticed or unknown. Obviously, in the near term, the numbers were below our estimates of around Rs 1,700 crore profit versus a loss of Rs 4,400 crore odd.
Near term, it would remain on our selling side and maybe the mood of the investor would be nervous. But going forward, eventually the stock would form a base at lower levels — another 5% plus, minus — and from there people will start looking out for a forward looking statement. The valuation at which they have been trading obviously has the downside capped into it.
Do you sense that it is best to avoid aviation right now, if InterGlobes numbers were anything to go by? One cannot expect anything different from Jet whenever they do declare their numbers.
Post rise in oil prices, we have seen that aviation stocks have been moving downward. Indigos reported numbers were also bad. I dont think aviation numbers are going to improve near term unless the oil prices stabilise at lower levels.
Jet is another story. One has a clean balance sheet, with a less debt on the books and the other has a debt-ridden book. It is difficult to compare Jet with Indigo. If you want to own an aviation stock, Indigo makes more sense but I would rather avoid both the stocks in the near term.