State Bank of India (SBI) hit a fresh its 52-week high at Rs 549.05 apiece on Monday, after the bank reported highest quarterly net profit of Rs 8,432 crore, a surge of over 62% as compared to the corresponding quarter of the previous year.
State Bank of India (SBI) hit a fresh its 52-week high at Rs 549.05 apiece on Monday, after the bank reported highest quarterly net profit of Rs 8,432 crore, a surge of over 62% as compared to the corresponding quarter of the previous year. It has surpassed its previous high of Rs 546.35, touched on 4th February. Most brokerage firms have recommended to buy SBI shares, and forecast a potential upside of up to 37 per cent, at Rs 725 apiece. So far in the year, SBI stock has soared 16 per cent, while 26 per cent in the last six months. Strong net interest margins followed by improving asset quality ratios augur well for India’s largest public sector bank indicating a start of the revival of the credit cycle in India, Pavitraa Shetty, Co-founder & Trainer, Tips2Trades, told TheSpuzz Online. “Technically, SBI has strong support at Rs 520. A daily closing above 545 should lead to price targets of 570 & even 600 in the near-term,” Shetty added.
Motilal Oswal Financial Services
Buy, Target price: Rs 725, Rally: 37%
The domestic research and brokerage firm said that SBI has delivered a robust 3QFY22 even as it bravely fought off the COVID-19 impact. Its asset quality performance has been nothing less than incredible, easily
beating the best of its peers, said Motilal Oswal Financial Services. The bank has been reporting continued traction in earnings every successive quarter, aided by controlled provisions. “SBI remains our conviction buy in the sector. We revise our taregt price to Rs 725 per share,” it said.
Kotak Institutional Equities
Buy, Target price: Rs 700, Rally: 32%
SB reported 60 per cent on-year earnings growth led by 33 per cent on-year decline in provisions and 7 per cent on-year operating profit growth. The brokerage firm noted that all asset quality trends were showing improvement and RoE exceeded 12% despite higher provisions. “Valuations remain undemanding given the medium trends expected on RoEs. We maintain buy with a revised target price of Rs 700 from Rs 625 earlier. SBI is our top pick among banks,” it said.
Nirmal Bang
Buy, Target price: Rs 639, Rally: 21%
With further pick-up in utilisation level, the corporate book could start to deliver better growth rates and support overall bank credit growth, research firm said. Margins, adjusted for the income tax refund in 2QFY22, improved, aided by improvement in the credit/deposit ratio. “With the asset quality outlook positive and a healthy provisioning buffer, credit cost is expected to trend lower compared to the recent past, thereby aiding return ratios. The bank has reiterated its 15% ROE guidance. We maintain buy on the stock with a target price of Rs 639,” it said.
JM Financial Services
Buy, Target price: Rs 610, Rally: 15%
JM Financial Services maintained its positive stance on SBI and expects it to report RoA/RoE of 0.9%/16% by FY24E. While SBI’s valuations (core bank) have inched up to 1.0x FY24E BVPS given the steady improvement in asset quality and return profile, the research firm believes that pick-up in credit growth can be the next trigger for incremental stock price performance. “We maintain buy with a target price of Rs 610 valuing the core bank at 1.25x FY24E BVPS,” it said.
(The stock recommendations in this story are by the respective research analysts and brokerage firms. TheSpuzz Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
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