According to a CLSA note on State Bank of India (SBI), it has increased their target price on the stock to Rs 360 from the previous target price of Rs 330. Also, it has given a buy recommendation on the stock.
CLSA believes that despite the pandemic, SBI is expected to clock return on equity (RoE) of about 10 percent. It believes that there is deep value in the stock despite the 25 percent rally in the last 4 months. Hence, CLSA has reduced FY21 slippage estimate to Rs 600 billion resulting in 6-12 percent earnings increase.
PSU banks in general have been in focus off late. Canara Bank is looking to launch QIP of Rs 2,000 crore and banks like Punjab National Bank, etc. are also meeting institutional investors fund raising.
CNBC-TV18’s Abhishek Kothari gets a valuation check on the PSU banks.