SBI top Sensex gainer: Share price zooms 15% post Q3 results; CLSA, others see 58% rally in the stock


SBI was the top Sensex gainer, rising 15 per cent in the trade. Image: PTI

State Bank of India (SBI) share price hit a fresh 52-week high of Rs 408.35 apiece on BSE on Friday, after it posted better-than-expected October-December quarter results, along with healthy asset-quality performance. SBI was the top Sensex gainer, rising 15 per cent in the trade. So far in the day, over 53.55 lakh shares have been traded on BSE, while 10.45 crore shares exchanged hands on the National Stock Exchange (NSE). In today’s trade, Nifty Bank and Nifty PSU Bank indices have also scaled fresh 52-week high. AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online, that the Q3FY21 results of SBI were very good with a marginal increase in provisions leading to decline in PAT from a YoY basis. Analysts at CLSA and Motilal Oswal see up to 58 per cent rally in the stock price post Q3 numbers.

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Ramachandran also said that technically, the stock is very overbought and seems to have already factored in the results. “Investors are advised to book profits & look for a re-entry near 270-280 levels,” he added. During the quarter under review, SBI’s total income also fell marginally to Rs 75,980.65 crore during Q3FY21, as against Rs 76,797.91 crore in the same period of 2019-20, SBI said in a regulatory filing.

Analysts at CLSA said that SBI has been a consistent market-share gainer over the last decade. “Now with a dual benign credit cycle from FY22CL, we now expect SBI to rerate materially beyond 1x book. We increase our PT from Rs385 to Rs560 which implies 1.2x Mar-23 book and Rs166/share of subsidiary value,” analysts said with a ‘buy’ rating to the stock.

Those at Motilal Oswal Financial Services have given a target price of Rs 475, implying an upside of Rs 34 per cent from previous close. Analysts said that SBI reported robust operating performance in a challenging environment. “Loan growth is showing a healthy recovery in the retail portfolio, with disbursements in many business segments surpassing pre-COVID levels. Deposit growth stood strong, while margin remains broadly stable. Asset quality outlook remains encouraging, with controlled slippages, low restructuring levels, and CE at 96.5%,” they added.

(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

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