HomeMarket NewsStocks NewsShould you buy, sell or hold SBI shares now? Here's what brokerages say

Should you buy, sell or hold SBI shares now? Here's what brokerages say

SBI share price: The State Bank of India stock rose to a 52-week high of Rs 549.1 apiece on BSE, after the country's largest lender by assets reported its financial results for the October-December period. Here's what brokerages say.

By CNBCTV18.com February 7, 2022, 4:36:35 PM IST (Updated)

State Bank of India (SBI) shares were in focus on Monday after the state-run lender reported its financial results for the October-December period. The SBI stock rose as much as 3.6 percent to a 52-week high of Rs 549.1 apiece on BSE, coming within 2.5 percent of a 52-week high touched last week. 

SBI shares finished the day at Rs 533.2 apiece, up 0.6 percent.

On Saturday, SBI reported a net profit of Rs 8,431.8 crore for the third quarter of the current financial year, up 62.3 percent on a year-on-year basis. Its quarterly net interest income (NII) increased 6.5 percent on year to Rs 30,687.2 crore, according to a regulatory filing.

Analysts in a CNBC-TV18 poll had expected the lender's net profit at Rs 8,538.7 crore and NII at Rs 30,792.8 crore for the December quarter.

Its gross non-performing assets (NPAs) as a percentage of total loans came down to 4.5 percent in Q3 from 4.9 percent in the previous quarter. Its net NPA shrank to 1.34 percent in the December quarter from 1.52 percent in the three months to September 2021.

Should you buy, sell or hold SBI shares now? Here's what brokerages say:

Credit Suisse

The brokerage has an "overweight" rating on SBI and raised its target price raised to Rs 640. The lender's growth pickup will aid a steady rerating for the stock, according to Credit Suisse.

The brokerage has raised its FY22-FY24 earnings per share (EPS) estimates for SBI by 2-3 percent.

JPMorgan

The brokerage has an "overweight" call on SBI with a target price of Rs 650. The lender's credit costs are likely to remain contained going forward, and valuation attractive at current levels, according to JPMorgan.

The brokerage expects SBI to return to a normalised return on equity (RoE) of 15 percent in FY23.

CLSA 

The brokerage has a "buy" rating on the stock with a target price of Rs 750. SBI delivered a 14 percent return on equity (RoE) in the spike of the Rs 4,000 crore in non-NPA provisions and an increase in coverage, according to the brokerage.

The lender's flat operating expenditure on a sequential basis is one of the other positives, CLSA said.

The brokerage has raised its estimates by 2-4 percent for FY23 and calendar year 2024.

Jefferies 

The brokerage has a "buy" call on SBI and raised its target price for the stock to Rs 650.

A key positive in the lender's Q3 earnings was its low net slippages and improvement in loan growth, according to  Jefferies.

SBI's high CASA base and the corporate book should aid its topline growth, the brokerage added.

Kotak Institutional Equities 

The brokerage has a 'buy' call on SBI and raised its target price to Rs 700. The lender's 60 percent earnings growth on a year-on-year basis is led by a 33 percent decline in provisions with improvement in asset quality trends, according to Kotak Institutional Equities.

SBI's RoE exceeds 12 percent despite higher provisions and valuation remains undemanding, the brokerage said.

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