Goldman Sachs upgrades SBI to 'neutral'

Goldman Sachs on Wednesday upgraded State Bank of India (SBI) to "neutral" from "sell", despite weak earnings, saying it expected the bank's margin could improve in the first quarter of FY12.   However, it cut the 12-month price target to Rs2,650 from Rs2,700 to factor in a fall in earning estimates.

"In our view, SBI's recent valuation correction and measures taken by management, which we believe will help margins, warrants a neutral rating on the stock," the Wall Street investment bank said in a note.                                           

On Tuesday, SBI, India's largest lender, reported an unexpected slump in net profit, slammed by higher provisions, operating costs and taxes, sending its shares down more than 8%.