Sharekhan has given Buy recommendation for State Bank of India with a target price of Rs. 680 in its research report issued on Sep 21, 2022
Sharekhan’s research report on State Bank of India
We see continued outperformance in the stock, given that SBI remains the key beneficiary of improved outlook for the overall sector, led by acceleration in credit growth and benign credit cost over the medium term. We expect 10-15 bps margin improvement from FY22, led by repricing of loans in the next 3-12 months and strong retail growth in high-yield segments. Strong PPoP growth along with benign credit costs (due to sustained improvement in corporate credit cycle) should lead to improvement in return ratios in the near to medium term.
Outlook
At the CMP, SBI trades at 1.1x and 1.1x its FY2023E/FY2024E core ABV. We retain our Buy rating on SBI with a revised PT of Rs. 680. It is our top pick among PSU banks with strong balance sheet strength and improved core operating metrics.