Shares of State Bank of India (SBI) hit their record high in the afternoon session today. SBI stock gained 2.01% intraday to a high of Rs 758.70 on the BSE. Market cap of the bank climbed to Rs 6.75 lakh crore. Total 4.18 lakh shares changed hands amounting to a turnover of Rs 31.31 crore on BSE.
With the SBI stock hitting record high, the scrip is trading in the overbought zone, signals its relative strength index (RSI).
In terms of technicals, RSI of SBI stands at 76.2. SBI stock has a one-year beta of 0.6, 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.
The stock has risen 18% in 2024 and gained 39.75% in a year.
Axis Securities has a target price of Rs 800 on the SBI stock. Among PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy provision coverage ratio, robust capitalisation, strong liability franchise, and improved asset quality outlook, the brokerage said.
SBI is well poised to deliver RoA/RoE of 1%/16% over FY24-26E, supported by stable credit costs and steady cost ratios, said Axis Securities.
The lender has a price to book ratio of 2.05. The ratio is high compared to peers such as Bank Of Baroda (1.53), PNB (1.54) and Union Bank (1.49).
The state-owned lender also has a low PEG ratio of 0.3. A stock having PEG less than 1 is considered undervalued and with PEG ratio above 1 is regarded as an overvalued one.
The bank had a Capital Adequacy Ratio (CAR) of 14.68% as of December 2023 quarter. Public sector banks are required to maintain a CAR of minimum 12% in India.
Motilal Oswal has reiterated its buy call on the SBI stock with a target of Rs 860.
“We estimate a 22% CAGR in earnings over FY24-26 after a blip in 2HFY24, resulting in FY26E RoA/RoE of 1.2%/19.1%. SBI remains one of our preferred ideas in the sector and we reiterate our BUY rating with a target price of Rs 860. SBI is well positioned to deliver 13-14% loan growth over FY23-26E, aided by an improved disbursement rate for sanctioned loans and a recovery in corporate demand,” said Motilal Oswal.
The lender logged a 35% fall in Q3 net profit to Rs 9,163 crore against Rs 14,205 crore in the year-ago period. Profit earned Rs 105,733.78 crore in interest income in Q3 FY24, which was up 22% from Rs 86,616.04 crore reported in the year-ago period. Net interest income (NII) of the country's largest bank stood at Rs 39,815 crore, missing estimates of Rs 40,304 crore.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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