Shares of State Bank of India (SBI) have delivered flat returns this year. The stock has fallen 0.73% in 2023 and fallen 1.52% in a year. However, the banking stock has risen 7.65% in a week, signaling a minor bullish momentum in the large cap scrip. SBI shares rose 2.80% intraday to Rs 611.35 on the BSE. Market cap of the bank climbed to Rs 5.43 lakh crore. Total 8.24 lakh shares changed hands amounting to a turnover of Rs 49.87 crore on BSE.
In terms of technicals, the relative strength index (RSI) of SBI stands at 65.9, signaling it's trading neither in the overbought nor in the oversold zone. SBI stock has a one-year beta of 0.3, indicating very low volatility during the period. SBI shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.
Axis Securities has maintained a target of Rs 715 for the banking stock.
“Among PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalization, strong liability franchise, and improved asset quality outlook. We believe despite the margin pressures, SBIN remain well poised to deliver RoA/RoE of 1%/15-17% over FY24-25E supported by stable credit costs and steady cost ratios. We maintain our BUY rating on the stock with a target price of Rs 715/share (core bookat 1.3x Sep’24E and subsidiaries at Rs 164/share),” said the brokerage.
INCRED Equities has assigned a target price of Rs 750 to the banking stock.
The brokerage listed out key triggers to watch out for in coming months.
1. Strong asset quality in personal loans and other retail loans, despite the headwinds in small-ticket unsecured personal loans, to improve confidence on the asset quality front.
2. Lower credit deposit ratio to support margins in an aggressive competition environment for acquiring deposits.
3. The standalone SBI, with +1% RoA and an improving asset quality trend, is available at ~0.8x FY25F BV which, we believe, is attractive.
The brokerage assigned an ADD rating on the stock with a target price of Rs.750, corresponding to 1.2x FY25F P/BV. In case of bull-case scenario, assuming a 10% beat to estimates and a higher multiple of 1.4x, the target price can be Rs 850, said Axis Securities.
Shiju Koothupalakkal, Technical Research Analyst, Prabhudas Lilladher said, "The stock has indicated a huge gap up opening moving above the 50EMA and 100 period MA moving averages to improve the bias along with a falling trendline breakout above Rs 583 zone to strengthen the trend. The RSI is well placed and has much upside potential to carry on the momentum with next target visible near Rs 618-622 levels. The support would be maintained near Rs 575 zone."
Abhijeet from Tips2trades said, "SBI is bullish on the Daily charts with next resistance at Rs 601. A daily close above this resistance could lead to target of Rs 617 in the near term. Support will be at Rs 584."
Deven Mehata Equity Research Analyst at Choice Broking said, "State Bank of India (SBIN) has a strong support base at Rs 575, coinciding with the 50-Day Exponential Moving Average (EMA). The stock's upward momentum is reinforced by trading above all key moving averages, affirming its overall strength Identified resistance at Rs 605 level which presents a potential breakout point. A successful breach could propel SBI toward Rs 630 level, offering a clear target for traders and investors. The Relative Strength Index (RSI) at 65 indicates a healthy level of strength without venturing into overbought territory Strategically, maintaining long positions with a trailing stop loss at 575 is advised, ensuring protection of gains while allowing for potential upward movement."
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