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Buy This Banking Stock For 40% Returns, Says Motilal Oswal & Emkay Global
State Bank of India (SBI) has had a fabulous set of quarterly numbers and most brokerages are gung-ho on the stock. Foreign brokerages like CLSA, Macquarie and HSBC are bullish on the stock. Apart from this the long list of domestic brokerages that have a buy on the stock of SBI, include names like Kotak Institutional Equities, Emkay Global, HDFC Securities and Motilal Oswal. Let's take a look at what target prices brokerages have.
Almost all brokerages have a “buy” call on the stock of SBI
| Current market price | Recommendation | Target price | |
| HSBC | Rs 435 | Buy | Rs 530 |
| Emkay | Same as above | Buy | Rs 600 |
| HDFC Sec | Same as above | Buy | Rs 501 |
| Motilal Oswal | Same as above | Buy | Rs 600 |
| CLSA | Same as above | Buy | Rs 650 |
Apart from this, there are several other brokerages that have a buy on the stock including the likes of Kotak Institutional Equities. At the current market price of Rs 435, the stock can move at least 40% higher, if we average the broker targets.
Buy the State Bank of India stock says Emkay Global for target of Rs 600
While we do not want to go into details of the stock provided by each and every broker, let's get into what broking firm Emkay Global has to say. According to the brokerage, the first quarter FY 2022, operating performance beat estimates on healthy fees/treasury gains, but high provisions led to a 5% miss on net profits at Rs 65 billion (estimates Rs 68.4 billion). Asset quality performance was mixed, with gross non performing assets up 34 basis points, quarter on quarter to 5.3% (led by retail/SME), restructured pool rising moderately to 0.8% of loans (pipeline at 0.1%) and SMA pool flat qoq at 0.5%
The firm has retained buy on the stock with an overweight stance and a target price of Rs 600, valuing core bank at 1.4x Sep'23E ABV and subs/investments at Rs185, leading to a near 40% upside from the current levels.
"State Bank of India is the second best pick after ICICI Bank, and we believe that better-than-expected growth/asset quality movement could provide further upsides to earnings/valuations," the brokerage has said.
Broking firm, Motilal Oswal too has a buy call on the stock. quarter. "We estimate State Bank of India to deliver FY22/FY23 Return on Equity of 13.1% and 14.6%, even as we build in credit cost of 1.6% and 1.3% for FY22E/FY23E. Maintain buy, with revised price target of Rs 600," Motilal Oswal has said.
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