SBI share price outlook: Want to invest in this stock? Know how it fares technically, fundamentally

SBI share price outlook: If you are a State Bank of India (SBI) stockholder or are planning to invest in this stock, this is what you need to know about the all-round perspective of the stock from technical to fundamental standpoint. 

Stock to Buy – SBI: Technical Analysis  

At 11:55, SBI share price was trading at Rs 241.65 down almost 0.5 per cent. Technical Analyst Nilesh Jain of Anand Rathi Securities remains bullish on the stock in the near term. He said that the stock has been witnessing some consolidation. 

SBI counter has been making higher tops and higher bottoms on the technical charts. It has a strong support at Rs 232 and the next major support is Rs 220. 

The short term target for this stock is Rs 280, the technical analyst said. The positional view on this stock is positive and it could likely achieve a target of Rs 300 over the next two-month period, he added. This is around a 25 per cent upside from the current levels. 

This counter has been slightly over bought so the advice for investors is to buy at dips. He said that the levels around 235 are the right levels for fresh positions.  He puts the stop loss at Rs 220.  

Stock to Buy – SBI: Fundamental Analysis 

Kotak Securities puts a target price of Rs 340 on this stock. In a 5 November report, when the stock was trading around Rs 207, it estimated a 64.3 per cent upside in the stock. 

The rationale behind the estimates include expectation around performance on collections and outlook on restructured loans, putting it at par with the private banks.  

Kotak Securities expects the retail book to hold up better in this cycle as compared to corporate book. It said that bank’s legacy book has been adequately addressed. The RoE (Return on equity) is expected to be at 10 per cent in FY22E while the earnings are estimated to grow at 24.8 per cent in FY22E. 

What works for SBI stocks: 

1. In Q2FY21, bank reported 50 per cent yoy earnings growth on the back of 25 per cent yoy decline in provisions 
2. Net Interest income (NII) growth at 15 per cent yoy; Net Interest Margin (NIM) improved from 0.05 per cent to 3.1per cent 
3. Gross Non-performing loans (NPL) hit a 5-year low at 5.3 per cent; Net NPL is at an 11-year low at 1.6 per cent 

Negatives: 

1. Decline in loan growth 6 per cent yoy driven by subdued corporate loans 
2. Possible slippage (not accounted due to Supreme Court ruling) of 0.5 per cent of loans 

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The 52-week high for SBI stocks is Rs 351 which it achieved on 28 November 2019. Meanwhile, the 52-week low was Rs 149.45, hit on 22 May 2020.