State Bank of India (SBI) shares reached a new peak during today’s afternoon session. SBI’s stock surged by 2.01% intraday to reach Rs 758.70 on the BSE, leading to a market capitalization increase to Rs 6.75 lakh crore. A total of 4.18 lakh shares were traded, amounting to a turnover of Rs 31.31 crore on the BSE.
With SBI’s shares hitting a record high, its relative strength index (RSI) indicates it’s trading in the overbought zone.
In technical terms, SBI’s RSI stands at 76.2, and its one-year beta is 0.6, reflecting very low volatility over the period.
SBI shares are currently trading above their 5-day, 10-day, 20-day, 50-day, 100-day, and 200-day moving averages.
The stock has seen an 18% increase in 2024 and a 39.75% gain over the past year.
Axis Securities has set a target price of Rs 800 for SBI stock. According to the brokerage, SBI stands out among PSU banks as the top choice for benefiting from the Indian economy’s gradual recovery, thanks to its strong provision coverage ratio, solid capitalization, reliable liability franchise, and positive outlook on asset quality.
Axis Securities predicts that SBI is well positioned to achieve RoA/RoE of 1%/16% between FY24-26E, supported by consistent credit costs and stable cost ratios.
SBI’s price-to-book ratio stands at 2.05, higher than its peers such as Bank Of Baroda (1.53), PNB (1.54), and Union Bank (1.49).
Moreover, SBI boasts a low PEG ratio of 0.3, indicating undervaluation (PEG < 1 suggests undervaluation, while PEG > 1 suggests overvaluation).
As of the December 2023 quarter, SBI had a Capital Adequacy Ratio (CAR) of 14.68%, exceeding the minimum requirement of 12% for public sector banks in India.
Motilal Oswal has reiterated its buy recommendation on SBI stock with a target price of Rs 860.
“We anticipate a 22% CAGR in earnings between FY24-26, following a downturn in 2HFY24, leading to an expected FY26E RoA/RoE of 1.2%/19.1%. SBI remains among our top picks in the sector, and we uphold our BUY rating with a target price of Rs 860. SBI is well positioned to achieve 13-14% loan growth over FY23-26, supported by enhanced disbursement rates for sanctioned loans and a rebound in corporate demand,” stated Motilal Oswal.
During Q3, the bank witnessed a 35% decline in net profit to Rs 9,163 crore compared to Rs 14,205 crore in the corresponding period last year. Interest income amounted to Rs 105,733.78 crore, marking a 22% increase from Rs 86,616.04 crore in the same period last year. However, the net interest income (NII) of the country’s largest bank stood at Rs 39,815 crore, slightly below the estimated Rs 40,304 crore.
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