SBI shares: What to do with stock of India's largest bank after its strong Q4 show, dividend announcement

State Bank of India (SBI) shares — traded on stock exchanges BSE and NSE with the symbol SBIN — rose on Friday, a day after the country's largest lender by assets staged a strong performance in its quarterly earnings report. The SBI stock gained by as much as Rs 11.9 or 2.1 per cent to Rs 586.1 apiece on BSE.  

Most brokerages retained their positive ratings on SBI shares, with their targets ranging from Rs 695 to Rs 760 — implying a potential upside to the tune of Rs 21-32 per cent compared to Thursday's closing price. 

SBI Q4 results, dividend: A summary 

During market hours on Thursday, SBI — India's largest lender by assets — reported an 83.2 per cent year-on-year increase in net profit to Rs 16,694.5 crore for the quarter ended March and 29.5 per cent growth in net interest income (NII) to Rs 40,392.5 crore. 

According to Zee Business research, SBI's quarter net profit was estimated at Rs 14,800 crore and NII at Rs 40,000 crore.

SBI's board recommended a dividend of Rs 11.3 per share, translating to a payout of 1,130 per cent given the face value of Re 1 per share.

EDITOR'S TAKE | What Anil Singhvi makes of SBI Q4 results 

Zee Business Managing Editor Anil Singhvi said that SBI's strong quarterly show is mainly driven by recoveries. "Barring recoveries, the performance is not that strong," the market wizard said.

How brokerages read PSU banking major SBI's Q4 results, dividend announcement

According to JPMorgan, which maintained an 'overweight' rating on SBI shares with a target price of Rs 720 (implying 25 per cent upside), the lender's net interest income was driven by lower provisions while operating profit was in line with estimates.   

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