This largest PSU bank, which is engaged in providing a wide range of financial services, including personal banking, corporate banking, international banking, rural banking, and government banking, is in focus after Sharekhan has given a buy target price of Rs. 980, which has an upside potential of 34.55 percent.
Stock Price Movement:
With a market capitalization of Rs. 6,52,389.72 crores, the share of State Bank of India Limited has reached an intraday high of Rs. 733.90 per equity share, rising nearly around 0.76 percent from its previous day’s close price of Rs. 728.35. Since then, the stock has retreated and is closed at Rs. 729.95 per equity share.
Company Overview:
State Bank of India (SBI) was headquartered in Mumbai and is India’s largest public sector bank, holding a 23 percent market share in assets and 25 percent in loans and deposits. With over 200 years of legacy, it serves 50 crore customers globally through extensive branches, ATMs, and subsidiaries like SBI Life Insurance and SBI Card.
Target Price:
Sharekhan has maintained a buy rating on the State Bank of India Limited and given a target price of Rs. 980, which has an upside potential of 34.55 percent from the previous day’s close price of Rs. 728.35.
Rationale:
According to Sharekhan’s analysis, SBI is expected to maintain loan growth of around 14-15 percent and keep its Net Interest Margins (NIMs) steady at approximately 2.9-3 percent in the coming quarters. Even if there’s a small interest rate cut, it is unlikely to significantly impact SBI’s margins.
The bank’s asset quality outlook remains stable, which could help reduce credit costs and support its earnings and returns. Sharekhan has projected SBI’s Return on Assets (ROA) at about 1 percent and Return on Equity (ROE) at roughly 15 percent for the financial years 2025 to 2027.
Highlights of Loan Segment
SBI’s loan growth shows positive trends across segments. The corporate credit pipeline stands at Rs. 4.83 trillion, with Rs. 2.22 trillion already approved and Rs. 2.61 trillion in progress. Retail loans increased by 11.6 percent year-on-year, with strong growth expected in auto and home loans. SME loans also rose by 15 percent year-on-year, and the bank anticipates new opportunities for MSMEs following recent budget changes.
Recent quarter results:
State Bank of India Limited’s net interest income has increased from Rs. 68,092 crore in Q3 FY24 to Rs. 77,397 crore in Q3 FY25, which has grown by 13.67 percent. The net profit has also grown by 67.99 percent from Rs. 11,598 crore in Q3 FY24 to Rs. 19,484 crore in Q3 FY25.
Written By – Nikhil Naik
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