SBI share price to give 30 pct returns! Is this a share to buy? Experts on a money-making opportunity
SBI share price is expected to hit Rs 404 levels in one year, but should investors buy SBI shares at around Rs 310 levels?
SBI share price has shown huge correction in the last six months, especially in the first two months. SBI share price slipped from Rs 360 per stock levels to around Rs 250 per stock levels after the weak quarterly numbers. In July 2019, the SBI share price started correcting after the announcement of weak quarterly numbers and make a low of Rs 250 per stock levels. But, in the next quarter, it came with strong quarterly numbers and in return, it started to scale and pare its losses in the previous quarter. From October 4, 2019 onwards, SBI share price has been surging and has reached to Rs 324 per stock levels. According to the stock market experts, the Bank Nifty is showing weakness and this weakness may further continue for a few more trade sessions. They are of the opinion that SBI share price is looking good for long-term investors but they need to follow a strategy.
Elaborating upon the SBI share price outlook, Simi Bhaumik, a SEBI registered technical equity expert said, "SBI shares are a good share to buy, but in the current market scenario when the Bank Nifty is showing weakness, I would advise share market investors to wait for a while till this correction in Bank Nifty stops. SBI stock has strong support at Rs 300-Rs 305. If the SBI stock price sustains above this level then I would advise investors to take buy position at around Rs 310 levels." However, she strongly advised SBI shareholders to maintain the stop loss at Rs 295 levels.
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Highlighting the strong fundamentals of the SBI shares, Dipen Sheth, Head- Institutional Research at HDFC Securities said, "Despite the possibility of lumpy near term stress (DHFL is likely to be recognized as an NPA in 3QFY20), we believe the worst in terms of asset quality is long behind SBIN and that eventual healing is highly likely. Faster resolutions could result in positive surprises on this front."
Sheth said that SBI has increased coverage dramatically in the past year (+ around 900bps) and coverage on exposure to historically vulnerable sectors, too, is high. Consequently, we expect credit costs to trend downwards and RoAAs to expand, although not to 1 per cent levels.
On his suggestion to the share market investors in regard to the SBI shares, Dipen Sheth said, "I would advise stock market investors to buy SBI shares for the target of Rs 404 in one-year time-horizon."