State Bank of India (SBI) shares gained momentum after global brokerage firm Jefferies maintained its ‘buy’ rating on the stock, raising the target price from ₹1,000 to ₹1,030. The brokerage remains optimistic on SBI due to its strong fundamentals and stable asset quality.
Key Highlights from Jefferies’ Call:
- Top Pick: SBI continues to be one of Jefferies’ top picks, with steady asset quality and growth in deposits as key factors.
- Profit Beat Estimates: Higher mark-to-market (MTM) gains and lower staff costs contributed to a profit that exceeded estimates.
- Stable Asset Quality: The bank maintained stable asset quality, even in unsecured loans, keeping credit costs low.
- Estimate Adjustments: Jefferies adjusted estimates by -2% to +3% to account for slightly weaker net interest margins (NIMs).
- Potential Upside: Lower staff costs could provide additional upsides.
- Franchise Strength: SBI is preferred for its stronger franchise and higher profitability compared to peers.
- Capital Adequacy: SBI’s Common Equity Tier 1 (CET-I) Capital Adequacy Ratio stands at 10% (excluding profit), well above the regulatory norm of 8.6%.
As of 11:21 am, SBI shares were trading 0.97% higher at ₹851.30 on the NSE.
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State Bank of India