ICICI Securities’ target price is Rs 805, which is greater than several of its competitors, such as HDFC Securities, LKP Securities, and JM Financial.
According to a research by ICICI Securities, the State Bank of India (SBI) stock has been on the rise and investors can gain up to Rs 190 per share from present prices. The stock was initially suggested by the brokerage at a price of Rs 594 for a target price of Rs 673; it has since been revised to Rs 805 per share with an estimated gain of more than 30%.
Among its competitors, ICICI Securities’ target price is greater than those of HDFC Securities, LKP Securities, and JM Financial.
While LKP and JM have set price targets of Rs 718 and Rs 675, respectively, HDFC Securities has set a target price of Rs 700.
Due to the strong trend in PSU Bank stocks, SBI shares closed Monday at Rs 613 on the NSE and were up more than 3%.
Largest public lender in India was viewed with confidence due to better-than-anticipated third-quarter performance. According to ICICI Direct, SBI has been operating at full capacity. During Q2FY23, the Return on Assets (RoAs) passed the 1% threshold.
SBI share price increases 4% as a consequence of upgrades from JP Morgan and Goldman Sachs and solid September quarter results. According to ICICI Direct, SBI has been operating at full capacity. During Q2FY23, the Return on Assets (RoAs) passed the 1% threshold.
The bank announced its best quarterly profits on Saturday, driven by robust core operating profit growth and loan growth that reached a 19-quarter high. The net profit increased to Rs 13,264 crore, or 74% year over year and 119% quarter over quarter. For the reporting quarter, net interest margins (NII) increased by 13% YoY and 13% QoQ to Rs 35,183 crore. To reach 3.32 percent, net interest margins increased by 30 bps sequentially.
According to ICICI, the support will encourage additional stock re-ratings.
The “music” is expected to continue for SBI for a little longer, according to HDFC Securities, given the effects of MCLR have not yet materialised. The firm reported that the results for the July-September quarter far exceeded its expectations. In order to account for improved NIMs and faster near-term loan growth, it was said that “we revise our FY23E/FY24E predictions.”
We believe the annual ROE objective of 15% is achievable in FY23-24E because of the improving operational environment, substantial contingency buffer, and robust growth forecast, according to LKP Securities.
Investors, however, also need to be aware of these challenges. The fact that deposit growth is currently 10 percentage points lower than loan growth may not be good for the bank, according to HDFC Securities.
The primary risks were highlighted by ICICI in a statement that read, “Equity raising to boost CET (at 9.5%) may dilute interim RoEs.” It went on to say that increased deposit rates and competitive pressure would hinder NIM expansion.