Buy State Bank of India; target of Rs 710: Sharekhan

Sharekhan is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 710 in its research report dated November 04, 2023.

Broker Research

November 06, 2023 / 21:38 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on State Bank of India

PAT of Rs. 14,330 crore was marginally above estimates mainly on minimal credit cost despite a large one off cost, translating into an RoA of ~1%. Core credit cost stood at 22 bps vs. 33 bps q-o-q and 28 bps y-o-y. Core PPoP growth (excluding one off cost ~Rs. 3,417 crore) was muted as expected, grew by 2% y-o-y / down 6% q-o-q. Loan growth was at 13% y-o-y / 3% q-o-q and NIMs fell by 4 bps q-o-q. Asset quality was stable including unsecured book. Lower slippages, higher recoveries and contained write-offs led to improvement in headline asset quality ratios q-o-q.

Outlook

We believe bank is likely to sustain RoA of ~1% in the near to medium term. At CMP, SBI trades at 0.9x/0.7x its FY2024E/FY2025E core BV estimates. We maintain a Buy rating on the stock with an unchanged PT of Rs. 710.

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