Buy State Bank of India; target of Rs 975: Sharekhan

Sharekhan is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 975 in its research report dated November 08, 2024.

Broker Research

November 11, 2024 / 20:50 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on State Bank of India

PAT at Rs. 18,331 crore (up 28% y-o-y) was significantly above estimates mainly driven by higher treasury gains and other income resulting in RoA/RoE at .17%/18.0% in Q2FY25. Lower slippages (0.59% annualised versus 1.08% q-o-q) led to stable asset quality thus core credit cost was also lower at 38bps annualized versus 48 bps q-o-q and 22 bps y-o-y. Bank guided that overall portfolio is still not showing worrying signs including unsecured retail loans. NIMs declined 8 bps q-o-q at 3.14%. Loan growth was healthy at 15% y-o-y ahead of industry average while deposits grew by 9% y-o-y. Endeavour is to ensure incremental credit growth is supported by incremental deposit growth going forward.

Outlook

Bank is reasonably confident to deliver 14-16% loan growth and sustain RoA of ~1%. Stock trades at 1.2x/1.1x its FY2025E/FY2026E core BV estimates. We maintain a Buy with an unchanged PT of Rs. 975.

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