Shares of the State Bank of India (SBI) increased by 1.91%, closing at ₹797 on the BSE during the latest trading session. Over the past year, SBI's stock has risen by 36%, delivering strong returns to investors. The stock, which stood at ₹585 on 9 October 2023, has outperformed key indices like the Nifty Bank, which climbed by 16.22%, and the Sensex, which grew by 24.35% in the same period. With a market capitalisation of ₹7.11 lakh crore, SBI saw 8.07 lakh shares traded, generating a turnover of ₹64.34 crore on the BSE.
This growth has drawn the attention of those interested in share market investment. Let's explore the bank's recent performance in more detail.
Despite its impressive one-year growth, SBI shares remain below certain key moving averages, such as the 50-day, 100-day, and 150-day averages, but they are trading higher than the 10-day, 20-day, and 30-day averages. The stock's relative strength index (RSI) is currently at 43.6, indicating it's neither overbought nor oversold. With a one-year beta of 1.4, the stock has experienced significant volatility over the past year. However, SBI's fundamentals remain solid, making it a strong contender for share market investment.
Global brokerage Nomura has issued a 'Buy' call on SBI, setting a price target of ₹980 per share. According to Nomura, SBI's solid asset quality and strong track record in retail lending place it in a strong position for growth. The brokerage also noted that SBI has the lowest loan-to-deposit ratio (LDR) among large banks, which, along with its strong deposit base, positions it well for continued growth. For share market investment, this positive outlook enhances SBI's appeal.
Axis Securities, another major brokerage, has set a higher target of ₹1,030 per share. Axis highlighted that while credit costs are likely to stabilise, no significant asset quality challenges are expected. The bank's solid credit-deposit ratio, healthy provision coverage, and strong capitalisation make it a top pick for those seeking long-term share market investment opportunities.
While SBI's prospects are promising, there are some risks to consider. A significant slowdown in credit growth could impact the bank's future performance. However, brokerage Emkay remains bullish, with a 'Buy' recommendation and a price target of ₹1,025. Emkay noted that while deposit growth was slower in the first quarter, SBI's liquidity remains strong, and the bank is expected to raise capital soon to comply with new expected credit loss (ECL) norms. These developments could make SBI an attractive option for share market investment in the long term.
SBI's first quarter (Q1FY25) financial performance was strong, with a 178.24% year-on-year (YoY) rise in standalone net profit, which reached ₹16,884.29 crore, compared to ₹6,068.08 crore in the corresponding quarter last year. The bank's net interest income (NII) increased by 24.71% to ₹38,905 crore, up from ₹31,196 crore YoY. These impressive results underscore the bank's operational strength, making it a solid option for share market investment.
SBI's stock has demonstrated strong growth, rising 36% over the past year, with positive financial performance in the first quarter. Despite potential challenges, the bank's solid fundamentals and positive brokerage outlooks make it an attractive choice for share market investment. Investors looking for a well-performing banking stock with strong growth potential should consider SBI for their portfolio.
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