After posting the largest ever quarterly loss figure of Rs. 7718 crore for the quarter ended March, the stock of SBI is seen surging in trade on Wednesday by as much as 6% to scale to a 12-week high of Rs. 269.70 on the BSE against its previous closing price of Rs. 254.15.
Top brokerages see an upside in the stock by as much as 25-50% and still have maintained a 'buy' rating for the stock as the largest state-run lender projects recovery over the next two years time.
Global brokerages including BofaML, Citi hold the view that recognition of most NPAs with the bank has been done and this only improves outlook for coming quarters. The bank's total NPA stands at Rs. 2.23 lakh crore or 10.91% of the total loans.
The bank despite reporting the second largest quarterly loss figure only next to PNB in the banking industry is still a preferred pick and CLSA is positive on the stock considering the bank's capitalization, asset quality and CASA franchise model.
In today's trade, while the benchmark indices trades in a range, SBI's pull up has given gains to the Nifty PSU Bank index.
On the sidelines of its quarterly results announcement on Tuesday, the state-run lender said that it will grow its loan book at an annual average rate of 12% and also work to decrease the provisioning cost, reduce gross non-performing loan ratio to half and hence scale up margins.
At 2:00pm, the stock was quoting higher at Rs.264.75, up over 4%. Meanwhile Nifty PSU Bank also rallied as much as 5% led by gains in SBI.