What should investors do with SBI post Q3 results? Brokerages see 20-40% upside

Most global brokerage firms maintained their rating on State Bank of India (SBI) post December quarter results after India's largest lender reported a 62% YoY rise in its net profit at Rs 8,432 crore for the quarter ended December 31, 2021.

It had posted a profit of Rs 5,196 crore in the corresponding quarter last year. The bank has registered its highest quarterly Net Profit.

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The most aggressive target price of Rs 750 was put out by CLSA post December quarter results that translates into an upside of over 40 per cent from Rs 530 recorded on 4 February.

The public-sector lender's net interest income (NII) grew 6.5% to Rs 30,687 crore against Rs 28,820 crore posted last year. The Net interest margin (NIM) improved 6 basis points to 3.4% in the December quarter from 3.34% corresponding quarter last year.

Gross NPA for the quarter stood at 4.5%, which was lower than 4.9% in the September quarter. The net NPA declined to 1.34% in the reported quarter against 1.52% posted in the previous quarter.

Provisions and contingencies grew 15% YoY to Rs 3,096 crore against Rs 2,700 crore posted in the previous quarter.

Slippages for the quarter stood at Rs 2,334 crore against Rs 4,176 crore posted in September 2021 quarter. The bank's loan book grew 8.5% YoY.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

CLSA: Buy | Target Rs 750

CLSA maintained buy rating on SBI post December quarter results with a target price of Rs 750 that translates into an upside of over 40 per cent from Rs 530 recorded on 4 February.

The global investment bank expects a Return on Equity (ROE) of 15 per cent, and it remains one of the top portfolio picks. SBI clearly in an undershooting credit cycle, said the note.

Jefferies: Buy | Target Rs 650

Jefferies maintained buy rating on SBI post December quarter results with a target price of Rs 650 that translates into an upside of over 20 per cent from Rs 530 recorded on 4 February. Key positive was low net-slippages.

Better growth number is the key to lifting its low NII growth. The public sector lender is now disclosing NPL flow on accumulative basis. High CASA base and corporate book should aid top-line growth.

JPMorgan: Overweight | Target Rs 650

JPMorgan maintained overweight rating on SBI post December quarter results with a target price of Rs 650.

The loan growth is showing signs of a pick-up. Good print on asset quality, loan growth and margins, said the note.

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