SBI Share Price: BUY - Will it cross Rs 800? Check price targets

State Bank of India (SBI) stock has been on a roll and investors can earn up to Rs 190 per share from current levels, opined ICICI Securities in a report. The brokerage recommended the stock at a price of Rs 594 for the target of Rs 673 and has now increased it to Rs 805 per share, estimating more than 30 per cent upside in it.

The target price given by ICICI Securities is higher than some of its peers including HDFC Securities, LKP Securities and JM Financial.

While HDFC Securities has put a price target of Rs 700, LKP and JM have put targets at Rs 718 and Rs 675 respectively.

On Monday, the SBI shares closed at Rs 613 on the NSE and were up over 3 per cent riding on strong momentum in PSU Bank stocks.  

The optimism on India’s largest public lender was on better-than-expected September quarter results. ICICI Direct said that SBI has been firing on all cylinders. The Return on Assets (RoAs) crossed the 1 per cent mark during the Q2FY23.

SBI share price jumps 4% on JP Morgan, Goldman Sachs upgrades, strong September quarter results. ICICI Direct said that SBI has been firing on all cylinders. The Return on Assets (RoAs) crossed the 1 per cent mark during the Q2FY23.

The bank on Saturday reported its highest ever quarterly profits led by 19 quarter high loan growth and strong core operating profit performance. The net profit grew 74 per cent Year-on-Year (YoY) and 119 per cent Quarter-on-Quarter (QoQ) to Rs 13,264 crore. The net interest margins (NII) were up 13 per cent YoY and 13 per cent QoQ to Rs 35,183 crore for the reporting quarter. Net interest margins expanded by 30 bps sequentially to 3.32 per cent.

Also Read: SBI share price jumps 4% on upgrades from top brokerages, strong September quarter results

ICICI said that the sustenance will drive for further re-rating of the stock.

Meanwhile, HDFC Securities said that the “music” is likely to last longer for SBI as the impact of MCLR is yet to play out. In its reports, the brokerage stated that July-September quarter results were well above its estimates. “We tweak our FY23E/FY24E estimates to factor in better NIMs and higher near-term loan growth,” it said.

“With improving operating environment, ample contingent buffer and strong growth outlook, we believe the annual ROE target of 15% is achievable in FY23-24E,” LKP Securities said.

Headwinds 

However, investors must also watch out for these headwinds. Deposit growth currently at 10 percentage points and below loan growth could be a negative for the bank, HDFC Securities noted.  

"Equity raise to boost CET (at 9.5 per cent) may dilute interim RoEs," ICICI said highlighting key risks. Competitive pressure and deposit acceleration may weigh on NIM expansion, it further said.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)