Over the last three years, State Bank of India SBI has delivered over 180 per cent of the country's largest lender. The stock was trading around Rs 180 in March 2020, but is now around Rs 512 Thursday's closing price. The multibagger stock is down 23 per cent from its 52 week high of Rs 629.65, which was hit on December 15, 2022.
The state-backed lender has underperformed its peers in returns in the last year. Union Bank is the top gainer with a return of 65 percent during the period, while Bank of Baroda has delivered a 51 per cent return in a year. The shares of Canara Bank and PNB have a 29 per cent and 22 per cent return in a year.
On March 24, 2023, the large-cap stock was 1.42 per cent lower at Rs 505.40. The bank's market cap fell to Rs 4,51, 049.89 crore on the Bombay Stock Exchange.
Brokers and experts have maintained their bullish stance on the PSU bank stock. Foreign brokerage Jefferies said in its recent report that the valuations of Indian banks are looking attractive and that stocks trade below levels during the height of Covid risk. SBI is one of its top bank stock picks.
SBI is one of the best picks for us and is one of the top 3 holdings for our fund. There are a lot of reasons for this. One of the reasons we find it one of the best value buys is that it is very good value compared to private banks, said Rohan Mehta, Founder and Portfolio Manager, Turtle Wealth.
It is extremely comfortable to look forward to the price to book value. In the last 10 years, HDFC has performed 3 times more than SBI compared to SBI, and that is a clear indication that the value is getting merged and it is a case of value migration and turn around story for SBI. He said that it is a 'Buy' from our side.
Motilal Oswal believes that the global banking system has been facing challenges mainly due to liquidity issues rather than asset quality.
SBI, the brokerage, said it does not see any significant challenges to the Indian banking system.
The bank believes that there is an opportunity to pass on the MCLR hike, which together with lagged repricing of deposits, should boost the margin in the coming quarters. The quality of advances remains fairly under control, with a constant moderation in asset quality ratios. Motilal Oswal said that the bank does not expect any challenges and the slippages have been under control.
SBI has seen a sharp correction this quarter, down by almost 17%, to currently trade around 500 levels. Aamar Deo Singh, head advisory at Angel One Ltd said that the banking sector has come under pressure due to rising investor fears about global recession and negative news flows relating to the global banking system.
If the stock does not meet the 500 mark consistently on the downside, investors are advised to stay cautious. Ideally, good levels to accumulate would be in the zone of 460 -- 470. Singh said that the stock needs to sustain above 560 for any resumption in an uptrend.
SBI reported a 68 per cent increase in net profit at Rs 14,205, a gain of Rs 14,205 year-on-year. There were 34 crore for the December quarter compared to 8,431. In the same quarter last year, there were 88 crore.
Net interest income NII for the quarter increased 24.05 per cent YoY to 38,069 crore from 30,687 crore in the year-ago quarter. The net interest margin for the quarter was 3.69 per cent, up 29 basis points. The PSU bank reported a NIM of 3.55 per cent in September and 3.4 per cent in the year-ago quarter.