Brokerages are largely positive on SBI, citing strong fundamentals, healthy loan growth, and stable asset quality as key factors. Here’s a summary of recommendations and insights from top brokerage firms:
| Brokerage | Rating | Target Price | Key Highlights |
|---|---|---|---|
| Kotak Institutional Equities | Buy | ₹975 | Confident in SBI’s asset quality; expects healthy return ratios in the medium term. |
| Nomura | Buy | ₹1,050 | Raised FY25-27 EPS estimates by 4-7%; noted sector-leading loan growth and quarterly deposit growth. Current valuations are attractive. |
| CLSA | Outperform | ₹1,075 | Healthy loan growth, though deposit growth lags; maintains asset quality with forecasted 15%-16% RoE over the medium term. |
| JPMorgan | Overweight | ₹1,000 | |
| Bernstein | Market Perform | ₹810 | Notes strong RoA above 1% and 28% YoY EPS growth; however, core profitability metrics are weaker with an 8 bps decline in NIM. |
| Jefferies | Buy | ₹1,030 | Highlights stable asset quality; advises that deposit growth of 11-12% is necessary to support targeted loan growth. |
Key Brokerage Insights
- Kotak Institutional Equities: Recommends a ‘Buy’ rating on SBI, emphasizing that asset quality concerns are minimal and expects the bank to maintain healthy return ratios over the medium term.
- Nomura: Retains a ‘Buy’ rating, increasing its EPS estimates for FY25-27 by 4-7% and noting SBI’s sector-leading loan growth and consistent quarterly deposit growth. Valuations are considered attractive.
- CLSA: ‘Outperform’ rating with a target price of ₹1,075, highlights strong loan growth, though deposit growth lags. Asset quality is stable, with a projected 15%-16% RoE over the medium term, and multiples could rerate with continued loan growth.
- JPMorgan: Maintains an ‘Overweight’ stance.
- Bernstein: Provides a ‘Market Perform’ rating, acknowledging strong RoA and EPS growth, but points out that core profitability metrics have weakened slightly with an 8 bps dip in net interest margin (NIM).
- Jefferies: ‘Buy’ rating with a target of ₹1,030, notes stable asset quality. However, the brokerage suggests that deposit growth of 11-12% is essential to support the bank’s targeted loan growth.
Overall, brokerages are optimistic about SBI’s performance, highlighting robust loan growth, stable asset quality, and a strong earnings profile. While most brokerages rate SBI as a ‘Buy’ or ‘Outperform,’ Bernstein adopts a cautious ‘Market Perform’ stance due to slight weakening in core profitability metrics.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
