SBI share price is at all time high. HDFC Securities sees new peak in 6 months

on the evaluation of SBI shares, HDFC Securities said, “SBI has reported powerful performance in Q3FY22. The loan book has witnessed strong growth and low slippery volumes were the major positive surprise elements. We expect SBI to grow its loan book at a CAGR of 11 per cent. While NII and Net Profit are expected to grow at a CAGR of 11 per cent and 34 per cent respectively in FY 2011-24E, marginal improvement in ROAA is expected to be 0.9 per cent in FY14 from the current 0.5 per cent in FY 2011.

“The bank is witnessing overall credit growth of around 9 per cent in the near term with recovery in corporate loans, while retail credit growth may remain at 14-15 per cent. The bank is expecting a recovery. 80bn in FY22, of which approx. 56bn has been recovered in 9MFY22. We continue to watch for steady-state losses and credit costs, as the bank gradually re-risks the portfolio. The valuation of SBI remains attractive given the expected moderate trend on the bank’s RoE.”

Highlighting the improvement in asset quality of State Bank of India, the brokerage said, “Low slippery numbers have helped in improving asset quality, with GNPA and NNPA improving by 4.5 per cent and 1.3 per cent, respectively compared to 4.9 per cent and 1.5 per cent in Q2FY22. GNPA ratio improved with domestic corporate at 7.1 per cent and retail at 0.9 per cent. Provision coverage ratio improved by 120 bps QoQ to 71.2 per cent during the quarter. account is fully provided for.”

The brokerage further added that even on the digital side, SBI has done an excellent job as it has enabled the bank to achieve sustainable business. Over the years it has launched several digital initiatives through which the bank has now been able to capture major market share across multiple digital channels such as 14.46 per cent in POS terminals, 27.73 per cent in debit card spends and 24.72 per cent in mobile banking. number of transactions. Going increasingly digital plays a big role in helping the bank reduce costs, which in turn improves profitability metrics.

On the suggestion of positional investors with regard to SBI share price, HDFC Securities said, “We have evaluated SBI on SOTP basis to arrive at a fair value of the base case. 520. Our Bull Case is reasonably priced 570. Investors can buy the stock midway Add more on dips from 475 to 465 420 bands for the next 2 quarters.”

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.