UBS downgrades SBI to 'sell' ahead of earnings

Aug 10, 2012 |

Reuters

mumbai

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UBS downgraded State Bank of India to 'sell' from 'buy', saying a weak monsoon would add to its 'already high' non-performing loans while expecting margins to decline due to rising cost of funds and potential cuts in the lending rate.

UBS lowered its fiscal 2013 and 2014 earnings forecasts by 13 per cent, while reducing its 12-month price target on India's biggest private lender by 30 per cent to Rs 1,800, in a note released late on Thursday.

SBI is due to report its April-June earnings later in the day.

The stock fell 4.5 per cent to Rs 1,968.75 on Thursday, its biggest daily percentage fall since February 22, because of worries it would report disappointing earnings.

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