Shares of State Bank of India (SBI) reached a new high in the afternoon session today. SBI stock rose 2.01% intraday to a high of Rs 758.70 on the BSE. The bank's market capitalization rose to Rs 6.75 lakh crore. On the BSE, a total of 4.18 lakh shares changed hands, generating a turnover of Rs 31.31 crore.
With the SBI stock reaching a new high, it is trading in the overbought zone, according to its relative strength indicator (RSI). In technical words, SBI's RSI is 76.2. SBI stock has a one-year beta of 0.6, showing relatively low volatility during the period.
SBI shares are trading above their 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages. The stock increased 18% in 2024 and 39.75% in a year.
Axis Securities has set a target price of Rs 800 for the SBI stock. SBI is the best bet among PSU banks on the Indian economy's steady recovery because to its excellent provision coverage ratio, robust capitalisation, strong liability franchise, and better asset quality outlook, according to the brokerage.
Axis Securities believes SBI is well positioned to produce RoA/RoE of 1%/16% over FY24-26E, aided by stable loan costs and expense ratios. The lender has a price-to-book ratio of 2.05. The ratio is high when compared to rivals such as Bank of Baroda (1.53), PNB (1.54), and Union Bank (1.49).
The state-owned lender has a low PEG ratio of 0.3. A stock with a PEG ratio of less than one is considered undervalued, while one with a PEG ratio more than one is considered overvalued. The bank had a Capital Adequacy Ratio (CAR) of 14.68% as of the December 2023 quarter. In India, public sector banks must maintain a CAR of no less than 12%.
Motilal Oswal has confirmed its buy call on SBI shares, with a target price of Rs 860.
Motilal Oswal stated, "We predict a 22% CAGR in earnings during FY24-26, with a dip in 2HFY24, leading to a RoA/RoE of 1.2%/19.1% in FY26E. SBI remains one of our top picks in the industry, and we maintain our BUY rating with a target price of Rs 860.
Motilal Oswal believes SBI is well positioned to deliver 13-14% loan growth in FY23-26E, aided by a better disbursement rate for sanctioned loans and a resurgence in corporate demand.
The lender's net profit fell 35% in the third quarter to Rs 9,163 crore, compared to Rs 14,205 crore the previous year. Profit earned Rs 105,733.78 crore in interest income in the Q3FY24, up 22% from Rs 86,616.04 crore in the previous year. The country's largest bank's net interest income (NII) was Rs 39,815 crore, which fell short of expectations of Rs 40,304 crore.
