Buy State Bank of India; target of Rs 915: KR Choksey

KR Choksey is bullish on State Bank of India has recommended buy rating on the stock with a target price of Rs 915 in its research report dated February 10, 2025.

Broker Research

February 11, 2025 / 12:24 IST

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KR Choksey's research report on State Bank of India

Net Interest Income (NII) for Q3FY25 increased by 4.1% YoY (-0.4% QoQ) to INR 414,455 Mn. NII fell short of our estimates by 1.8%. PreProvisioning Operating Profits (PPOP) grew by 15.8% YoY (-19.6% QoQ) to INR 235,508 Mn in Q3FY25. SBIN reported a net profit of INR 168,914 Mn in Q3FY25, reflecting an 84.3% YoY increase but a 7.9% QoQ decline. Adjusted PAT growth, excluding last year's one-off expenses, stood at 3.9% YoY. SBIN remains well-positioned to capitalize on India's economic expansion, driven by sustained profit growth, improving asset quality, strong subsidiaries, and strategic digital and operational efficiencies, offering an attractive risk-reward at current valuations. We roll over our valuation to FY27E and assign a P/ABV multiple of 1.15x (1.5x FY26E) to the adj. book value of FY27E of INR 599.3 per share.

Outlook

Accordingly, we revise our target price to INR 915 per share (earlier INR 1,020), with an upside of 24.1%. We maintain our "BUY" rating on the shares of SBIN.

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