BUY, SELL or HOLD?Most brokerage houses seem bullish on the stock of the country’s largest public sector bank SBI today. The brokerage house has expressed confidence in this banking stock and has advised investment and given a new target price. The brokerage believes that the asset quality of the bank is improving, execution capability is strong, there is growth in deposits, better PPOP growth as well as the restructured book has been managed properly. Due to all this, the outlook of the stock seems strong. The brokerage has given a target price of up to Rs 1075 on the stock. Whereas right now the stock has fallen to around Rs 804.
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Stock crashes to Rs 804
Today, heavy selling in the stock market has also affected the stock of SBI. The stock fell by more than 4.50 percent today to Rs 804. Whereas on Friday it closed at Rs 848. SBI’s profit has increased by 1 percent on an annual basis to Rs 17,035.16, while in the same quarter a year ago, the company’s profit was Rs 16,884 crore. The total income of the bank has increased to Rs 1,22,688 crore in the June quarter, which was Rs 1,08,039 crore in the same quarter of the last financial year. Net Interest Income (NII) increased by 5.7 percent YoY to Rs 41,125 crore.
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Brokerage House Motilal Oswal
Brokerage house Motilal Oswal has recommended investing in SBI shares and has set a target price of Rs 1015. The brokerage says that the bank has reported an in-line quarter with PPoP growth driven by controlled opex amid modest revenue growth. Margins moderated at 8bp QoQ, although the bank expects margins to remain broadly stable going forward with a fluctuation of ±10 basis points due to levers such as CD ratio and MCLR revaluation.
Deposit growth was modest with a slight softening in CASA mix. However, the domestic CD ratio remained well under control at 69 per cent. Fresh slippages and credit costs increased on a quarterly basis in a seasonally weak quarter, however, healthy recoveries and upgrades improved the gross NPA ratio. The restructured book was well managed at 0.4 per cent of advances, while the SMA pool was controlled at 12bp loans.
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Brokerage House ICICI Securities
Brokerage house ICICI Securities has given a BUY rating to SBI shares and has set a target price of Rs 1000. The brokerage says that we have maintained our loan growth forecast for FY24-26E at 15 per cent. Despite the creation of 20 bps net interest margin compression in FY24-26E, PPoP is expected to grow at a strong 18 per cent CAGR due to increased opex in FY24. SBI is expected to show 100/90bps RoA and 17%/16% RoE for FY25/26E. The outlook for the stock is strong due to strong execution, healthy deposit franchise, better PPOP growth, continued comfort on asset quality and high visibility of over 16 per cent RoE.
Rating and Targets of Global Brokerage House
Brokerage house CLSA has maintained Outperform rating for SBI shares and has given a target price of Rs 1075.
Brokerage house Nuvama has maintained Buy rating for SBI shares and has given a target price of Rs 1026.
Brokerage house JP Morgan has maintained Overweight rating for SBI shares and has given a target price of Rs 1000.
Brokerage house Nomura has maintained Buy rating for SBI shares and has given a target price of Rs 1030.
Brokerage house Bernstein has given Market perform rating for SBI shares and has given the target price of Rs 810.
(Disclaimer: Investing or selling stocks is advised by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
