SBI shares surge to record high as analysts hike target price after Q3 results

Started by NiveRoshni, Feb 05, 2021, 05:35 PM

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NiveRoshni

SBI shares surge to record high as analysts hike target price after Q3 results



The economic revival is coming back with a vengeance, SBI's Chairman Dinesh Khara said in a post-earnings media call

Shares of State Bank of India (SBI), the nation's largest by assets, extended gains to a record high after quarterly profit beat analysts' expectations. SBI shares today rose as much as 15% to ₹408 in early trade as many brokerages increased their target price on the stock.

"SBI reported a robust operating performance in a challenging environment. Loan growth is showing a healthy recovery in the retail portfolio, with disbursements in many business segments surpassing pre-COVID levels. Deposit growth stood strong, while margin remains broadly stable," Motilal Oswal said in a note.

The brokerage maintains a buy on the stock and has revised target price higher on the stock to ₹430/share.

Earnings of SBI, which accounts for about a fifth of loans in the country's banking sector, is a key indicator of the health of India's economy.

"The economic revival is coming back with a vengeance," SBI's Chairman Dinesh Khara said in a post-earnings media call, adding that the lender expects credit growth to return to double digits.

SBI reported a 15.5% growth in retail loans in December quarter, helping drive an overall credit growth of 6.73% for the reported quarter.

"It has a strong retail asset quality as witnessed during the COVID outbreak. The bank is well on track to keep credit cost under control, while recoveries from the resolution of large accounts can further support earnings. We believe the earnings normalization cycle for SBI has begun as the uncertainty ushered by COVID-19 has receded significantly," Motilal Oswal said.


The bank's gross bad-loan ratio was 4.77% at the end of December, compared with 5.28% three months earlier. But that ratio would have been 5.44% if Supreme Court hadn't barred banks from classifying any loans as non-performing assets.

The lender's net profit came in at ₹5,196.22 crore as against ₹5,583.36 crore in the year-ago period and ₹4,574.16 crore in the preceding September quarter.


Source : https://www.livemint.com/market/stock-market-news/sbi-shares-surge-to-record-high-as-analysts-hike-target-price-after-q3-results/amp-11612498196815.html#referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s