.jpg)
Synopsis: SBI shares have experienced a 35% rise from their January low, with a current trading price around Rs817. While analysts project potential targets for SBI stock to cross the Rs1,000 mark, the bank's performance will depend on its ability to manage credit costs and maintain a strong asset quality. Analysts from Axis Securities, Emkay Global, and ICICI Securities offer price targets in the range of Rs1,000 to Rs1,030, indicating a positive outlook but also highlighting potential risks such as a slowdown in credit growth.
State Bank of India (SBI) shares have shown significant growth, rising 35% from their January 2024 low. As of the latest trading session, the stock is hovering around Rs817 on the BSE, with a market capitalization of Rs7.29 lakh crore. This impressive gain has led investors to wonder whether SBI shares can breach the four-digit mark, specifically Rs1,000, in the near future.
Performance Analysis
SBI stock, which hit a low of Rs605.05 on January 23, 2024, has since climbed steadily, providing solid returns for shareholders. The stock is currently neither overbought nor oversold, with a Relative Strength Index (RSI) of 50.4, indicating a balanced trading position. Additionally, SBI shares are trading above their 10-day, 20-day, 150-day, and 200-day moving averages, but below the 30-day, 50-day, and 100-day averages.
In 2024, SBI shares have already gained 27%, and over the past year, they have surged by 41%. Despite this strong performance, analysts remain cautiously optimistic about the bank's future.
Analyst Projections
Several brokerages have provided optimistic price targets for SBI stock. Axis Securities has set a target price of Rs1,030, citing SBI's strong asset quality, healthy provision coverage, and comfortable credit-deposit ratio. The brokerage believes that while there are no major asset quality challenges at present, aging provisions on standard assets may increase credit costs, though they expect SBI to maintain a return on assets (RoA) of 1-1.1% between FY25 and FY27.
Emkay Global has also issued a buy recommendation with a price target of Rs1,025, noting that despite slower deposit growth in Q1, SBI has sufficient balance sheet liquidity. The brokerage highlights the bank's strong Common Equity Tier 1 (CET1) ratio, which increased by 50 basis points quarter-on-quarter to 10.8%, benefiting from new investment classification norms.
ICICI Securities has pegged the stock at Rs1,000, valuing the core banking business at a multiple of 1.6 times FY26 Adjusted Book Value (ABV). The firm cites strong execution, a healthy deposit franchise, superior pre-provision operating profit (PPOP) growth, and continued asset quality comfort as key factors driving this valuation.
Challenges Ahead
While the outlook is largely positive, analysts also warn of potential risks. A significant slowdown in credit growth could impact the bank's performance. Additionally, the impending implementation of final Expected Credit Loss (ECL) norms may necessitate capital raising sooner rather than later.
Conclusion
SBI shares have shown remarkable resilience and growth, but whether they will reach the Rs1,000 mark depends on several factors, including maintaining asset quality and navigating potential risks in the banking sector. Investors are advised to stay informed and consider both the potential rewards and risks before making investment decisions.
Disclaimer: This article is for educational purposes only and should not be considered as investment advice. Please consult with a financial advisor before making any investment decisions.
.jpg)