Global brokerage houses are bullish on public sector lender State Bank of India (SBI) stock and have revised their targets for the scrip amid rally in PSU Banks. As on September 21, 2022, Nifty PSU Bank has risen by almost 12% in the past one month despite recent volatility. During the same period benchmarks Nifty50 declined around half per cent.  

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On Wednesday, SBI share price traded flat around Rs 575 per share in BSE intraday trade. The public sector counter has given a health return of around 30% in the past one year and yielded a multibagger return of over 200% in the past two years. 

Meanwhile, global brokerage firms Jefferies and Macquarie have maintained their ratings and revised SBI target prices.  

They feel healthy credit growth and low credit costs will support earnings growth of the public sector bank. They also noticed improvement in return on assets (ROA).  

Jefferies maintained a buy call on SBI and raised earnings by 3-5%. Saying that NIMs may be range bound as share of corporate credit rises, the global brokerage firm revised the target price to Rs 700, previously Rs 630. It turns out to be an upside of 20% on its previous closing price of Rs 574.10 per share.  

"SBI is well-placed to benefit from the pick-up in bank credit growth with a pick-up across the corporate segment– locally and overseas. A combination of better economic activity, inflation, & market share gains from bonds have lifted banks' corporate credit growth by 500-700bps since March 22, which along with strong retail credit growth has lifted overall bank credit growth to +15%," said Jefferies in a report. 

Another global brokerage firm, Macquarie, maintained it outperform rating on the government bank and raised the target from Rs 665 to Rs 695.