SBI share price target 2024: Can this PSU bank stock deliver post muted show in 2023?

State Bank of India (SBI), the largest public sector bank in terms of assets, deposits, branches, number of customers, and employees, delivered a 4 per cent return in 2023 so far, underperforming the BSE's Bankex's 10 per cent rise and the BSE Sensex's 17 per cent rally during the same period.

But a few brokerages now have SBI among their top picks for 2024. They included Axis Securities SMC Global and Motilal Oswal Securities, among others.

Among PSU banks, says Axis Securities, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalisation, strong liability franchise, and improved asset quality outlook.

This brokerage believes SBI remains well-poised to deliver return on asset of 1 per cent and return on equity of 16 per cent over FY24-26E, supported by stable credit costs and steady cost ratios.

"We recommend a Buy on the stock with a target price of Rs 800 per share, implying a significant upside of 25 per cent from CMP," the brokerage said.

SMC Global said the PSU bank has exhibited healthy performance on various parameters, with some parameters showing way better than industry performance and some showing in line with the industry performance.

SBI's strong underwriting practices have led to significant improvement in the asset quality of the bank, it said.

To recall, the SBI management plans to double its home loan portfolio in the next five years. To achieve its target of doubling the home loan book, the bank is strengthening its underwriting capability to improve delivery.

SMC Global has a price target of Rs 791 on the stock with an 8-10 months’ time frame on a two-year average P/BV of 1.73 times and FY25 BVPS (book value per share) of Rs 457.07.

SBI also finds itself in Motilal Oswal's list of 2024 stock picks. This brokerage, however, sees a lower target of Rs 700 on the stock. Meanwhile, InCred Equities suggested a target price of Rs 750 on SBI. Its bull-case valuation that assumed a 10 per cent beat to its estimates and a higher multiple of 1.4 times suggest a SBI target price of Rs 850.

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