Shares of State Bank of India (SBI) are currently on an upside gap of 0.31% at the level of 447 per share. SBI reaches 52-week high 549 on February 7, 2022, and a 52-week low of 400.50 on June 21, 2021, indicating that the stock is currently trading down 18.50% from its 52-week high and 11.73% near its 52-week low. The latest RSI level for State Bank of India (SBIN) is 36.30, which indicates that the stock is neither overbought nor oversold. Various brokerage companies are also bullish on SBI shares, Motilal Oswal has set a target price of 600 which indicates a potential increase of 35% from the current levels and ICICI Securities has posted . target price of 673 which indicates an increase of 50% from the current share price.
According to State Bank of India’s (SBIN) annual report Motilal Oswal, the bank highlights strong progress in strengthening its balance sheet and bringing ROE back to a long-term average of 15%. The focus is on building an improved loan book, while maintaining clearly strong underwriting across its low-pressure assets and high PCR.
Motilal Oswal in a note said that SBI’s “Corporate Segment has registered a 5x YoY jump in PBT, which underlines the structural reforms in the corporate business. The segment thus contributed to the total profit in FY12”. Contributed to ~51% versus 17% in FY2011. Retail PBT grew by 33% in FY2012 versus a 48% year-on-year decline in FY2011, adversely impacted by the pandemic-induced provisions. “
On the digital front, YONO continued to set new records with ~112m downloads and ~48m registered users, along with an average daily login of ~16.6m as of FY22. The brokerage said SBIN sanctioned 1.14m digital loans of INR211b in FY22 and overall, 36% of its retail asset accounts and 63% of SA accounts were opened through YONO.
“SBIN has delivered a strong FY22 driven by steady business/revenue growth and controlled provisions. Management expects momentum to remain healthy as usage levels improve, while retail growth is likely to remain stable. A higher mix of floating loans and CASA mix will support margins in a rising interest rate environment. Asset quality performance has been strong and the outlook remains healthy as the restructured book is under control at 1.1%, while the SMA pool of debt has fallen further by 13bp. We conservatively anticipate credit cost to moderate to 0.9%, enabling 28% earnings CAGR in FY22-24. Thus we expect SBIN to provide ROA/ROE of 0.9%/16.7% respectively in FY24. SBIN continues to be our top buy in the segment with a TP of INR600 (based on 1.2x FY24E ABV + INR195) from subsidiaries,” Motilal Oswal said in a note.
On the other hand, ICICI Securities in its report stated that “From ‘Entrepreneurial Bank, Sustainable Enterprise’ in FY15 to ‘Flexibility, People, Technology’ (as pillars of future growth), State of India The theme of the Bank’s (SBI) FY 2012 Annual Report is ‘Setting New Standards in Banking Excellence’ with a focus on Productivity, Adaptability, Sustainability and Inclusiveness.
SBI serves ~468mn depositors, 142mn financial inclusion accounts (BC channel), 14.2mn farmers, 4.5mn home loan customers, over 35% market share (among banks) in home loans, 27.6% share in debit card spends , 15.2 is reported. ICICI Securities said market share in PoS, 95.5% share of transactions across alternate channels, >48 million YONO registered users, government business turnover of Rs 55 billion, 17.9 million salary savings accounts, 9.8 million new regular savings accounts, etc.
“SBI reported growth build-up with ROE of 13.9% and ROA of 0.67% in FY12, GNPA at a decade low, <1% पर स्लिपेज, 55बीपीएस पर क्रेडिट लागत और स्थिर मार्जिन प्रोफाइल द्वारा सहायता प्राप्त की। 1% की 'नई सामान्य' क्रेडिट लागत के साथ परिसंपत्ति गुणवत्ता पर बेहतर दृश्यता, FY23E/FY24E के लिए 13%/15% की क्रेडिट वृद्धि, परिसंपत्ति समाधान और स्थिर NIM, FY23E/FY24E तक RoE को > 16% and the valuation will run up to 1.5x. Sep’23E Book. Maintain Buy with unchanged target price of Rs 673,” claimed ICICI Securities.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.