SBI jumps near 9% in two sessions amid strong Q4 – check what brokerages have to say

The shares of India’s largest lender State Bank of India spurted by around nine per cent on the BSE intraday trade in the last two trading sessions. Alone on Monday, the state-owned bank grew by around 4.5 per cent at Rs 419 per share on the BSE intraday. 

The bank, on Friday, reported a strong Q4 show on the asset quality front wherein slippages and restructuring were within guidance while sufficient provisioning buffer also provided comfort. 

The market analyst expects, SBI to reach its life high level of Rs 426.45 per share, which was hit on February 18, 2021. Moreover, the majority of the brokerage firms are also bullish on the stock after SBI’s strong Q4 performance, with surging around 80 per cent year-on-year basis. 

CLSA being most bullish on the stock, maintained a Buy stance by increasing the price target to Rs 650 per share on the visibility of 15 per cent ROE (return on equity), which is at its highest so far. It termed, SBI as best in class stock which is still at PSU (public sector unit) price. 

Similarly, Goldman Sachs also maintaining Buy call on SBI, has increased the price target as same as of CLSA to Rs 648 per share. It stated, the bank has reported a decade-best asset quality and improvement in RoA (return on assets) on expanding retail portfolio. 

Goldman increases the earnings expectations by 6 and 11 per cent for FY22 and FY23 respectively. The brokerage firm has positively surprised in FY21 on many fronts. 

Maintaining an Overweight stance on SBI, Morgan Stanley says the valuations are attractive at current levels, it raises the target by Rs 600 per share. The brokerage firm pointed out, the core PoPP also did well and will improve as well as FY21 asset quality strong despite Covid.  

SBI on Monday closed over two and a half per cent higher to Rs 412 per share as compared to Rs 401 per share previous close on the BSE intraday.