SBI Stocks Rose: State Bank of India (SBI) shares are seeing great gains today. In today’s business, SBI gained about 4 per cent and reached Rs 259. The stock had closed at Rs 247 on Wednesday. SBI is becoming the choice of experts and brokerage houses after performing better than expected in the second quarter. Now brokerage house CLSA has increased the investment target in SBI from Rs 330 to Rs 360. Investors can get 46 per cent return in SBI shares at current prices.
Expect strong growth in SBI
According to brokerage house CLSA, even though the shares of SBI have gone up by 29 per cent in the last 4 months, the price of the stock still looks attractive. The S&P BSE Sensex has gained 19 percent in this four months. According to the brokerage, SBI’s mid-term outlook is better. SBI is still trading below 0.5x FY22 core P / B, according to brokerage. SBI may have ROEs of around 10 per cent in FY21. CLSA has given a target of Rs 360 in SBI.
Brokerage house Motilal Oswal has also set a target of Rs 300 for SBI’s stock. The brokerage house says that SBI has performed well in the midst of challenges. There is a steady improvement in deposit growth. CE has improved to 97 percent on the asset quality front. Asset quality is getting better. The brokerage has raised earnings growth estimates for FY21 / FY22 to 45 per cent and 24 per cent. The brokerage house has set a target of Rs 300 for the stock.
Strong performance in the second quarter
In the second quarter, Collections Efficiency is reaching pre-Covid level. Advance has grown by 7 per cent on an annual basis. Retail loans grew by 14.5 percent on an annual basis. Home loan grew 10 percent on an annual basis. SBI made a profit of Rs 4574 crore in the September quarter of the financial year 2020-21. Interest income has been Rs 28181 crore. The bank has registered an improvement in profits, capital adequacy, provision coverage ratio etc. The bank’s net NPA ratio stood at 1.59 per cent in the second quarter, down 120 bps on an annual basis and 27 bps on a quarterly basis. The gross NPA ratio stood at 5.28 per cent, which is 191 bps on an annual basis and 16 bps lower on a quarterly basis.
(Note: We have given the information here based on the performance of the second quarter and the report of the brokerage house. Seeing the risk of the market, take the opinion of the first expert of the investment.)