SBI offers a 31% upside, analysts bullish post Q3

Mumbai: Brokerages maintained their bullish stance on the (SBI) after delivering yet another strong quarterly performance. Shares of the country’s largest lender ended flat on the NSE at ₹543.90 per share. It has lost over 10% of its value in the last month, with the bulk of the losses coming in the wake of a crisis that struck Adani Group companies.

Analysts, on aggregate, cut the consensus target by 1.15% to ₹713.76 per share, as per a Bloomberg poll of analysts. This represents a 31% upside potential from the current levels.

“We believe fears regarding a corporate group exposure are overblown (given exposure is limited to 0.9% of loans) and the recent correction is an opportunity to enter the name,” said

in a client note. The brokerage house assigned SBI’s core banking operations a valuation of 1.2 times its FY25 book value.

SBIAgencies

US brokerage house Jefferies also saw “limited risk” from Adani exposure even if it remains slightly ahead of other public sector banks. It saw a 44% and 61% upside in its base and bull case scenarios. “Like peers, SBI has benefited from a surge in corporate credit demand that has boosted loan growth and upfront repricing of loans. We expect NIMs to peak in the fourth quarter (FY23) or first quarter (FY24), and then start normalising downwards,” the firm said, advising clients to buy the stock. valued the stock at 1.3 times September 2024 book value and believes SBI’s higher mix of floating loans, which will benefit from repricing, will continue to support NII and overall earnings even as the deposit cost could rise.

“Asset quality was strong with tight control on slippages and improvement in headline asset quality ratios, with the restructured book under control at 0.9%,” said the brokerage house in a client note.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TheDailyCheck is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected] The content will be deleted within 24 hours.