SBI Stock Outlook: If you are looking for a strong stock in the year 2021, then SBI may be a better bet for you.
SBI/Brokerage Favourite Stocks: If you are looking for a strong stock in the year 2021, then SBI may be a better bet for you. This stock, which was under pressure in the year 2020, can get 21 percent return this year. Brokerage house MK Global has set a target of Rs 340 for the stock in 2021. Right now the current price of the stock is around 280 rupees. The brokerage house says that SBI can be a winner due to recovery in the country’s economy. The market share of the bank will increase further. He is in a better position than other banks in his area. The asset quality of the bank has been steadily improving since 2018. At the same time, the pressure of COVID 19 is now seen to be completely removed from the bank.
GNPA steadily decreasing since 2018
According to brokerage house MK Global, SBI’s GNPA has steadily decreased to 5.3% since 2018. It is the lowest among public sector banks and ICICI is better than private banks. The pressure on the bank has come down since COVID 19. The retail book is getting stronger now. The good thing is that corporate NPAs are also improving. COVID 19 provisioning buffer is 7100 crores which is 0.31 percent of the total loan.
Outperformed other banks
For the past several years, SBI has consistently outperformed other government banks in terms of credit and deposits. The bank has got the benefit of focusing on business or profit drivers with strategy with better management. The brokerage house has raised SBI’s credit growth estimates for FY2022 and FY2023 to 10 per cent and 14 per cent from the earlier 8 per cent and 12 per cent.
Retail Growth Pre COVID Level
According to the report, now retail growth is reaching the level of pre-COVID. This is due to the leadership position in home loan and auto loan. Corporate credit is also expected to improve. SBI has a good loan book with good credit. Along with improving the risk adjusted return, you will get the benefit of focusing on profit while maintaining the leadership position in the market.
Strong performance in second quarter also
In the second quarter, Advance has grown 7 percent year-on-year. 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 information here based on the report of the brokerage house. Seeing the risk of the market, take the opinion of the experts before investing.)