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ICICI Securities Maintains Buy Call To This Sensex PSB Stock For More Than 50% Gains

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ICICI Securities has published an equity research paper on the State Bank of India (SBI) where they highlighted the notable and relevant data points from its annual report and business growth in numbers. The brokerage has maintains a buy call for a Rs 673/share. SBI is India's largest and oldest bank with a market capitalization of Rs 397,904 crore. SBI is also a pioneer and market leader in SME financing with 829 SME-intensive and dedicated branches across India.

 

Target Price, CMP, Performance, Returns, 52-Week Low & High

Target Price, CMP, Performance, Returns, 52-Week Low & High

The current market price (CMP) of the SBI is Rs 445.85/share. The share price of the bank over the last 1year has gained 3.6%, a good return compared to the rest of the year. In the last 6 months, its share price has witnessed a fall of 8.6%. On long-term investment, the bank share price has maintained a good gain. In 3 years it has maintained 28.67% positive returns, and in 5 years it gave 57.07% positive returns, respectively.

The current market price of the SBI is trading at Rs 46.40/share above the 52-week low of Rs 400. Whereas, it is trading at Rs 102.90/share below its 52-week high of Rs 549/share. Considering the targeted price of Rs 673/share and the CMP, the stock has the potential to gain more than 50%, to be particular 51.95%.

 

Numbers tell the story of adaptability and inclusivity
 

Numbers tell the story of adaptability and inclusivity

From 'Enterprising bank, enduring enterprise' in FY20 to 'Resilience, People, Technology' (as pillars of future growth) in FY21, State Bank of India's (SBI) FY22 annual report is themed 'Setting new standard in banking excellence' focusing on productivity, adaptability, sustainability and inclusivity.

Growth in Numbers

~468mn depositors, 142mn financial inclusion accounts (BC channel), 14.2mn farmers served, 4.5mn home loan customers, 35%-plus market share (amongst banks) in home loans, 27.6% share in debit card spends, 15.2% market share in POS, 95.5% share of transactions in alternate channels, >48mn YONO registered users, Rs55trn government business turnover, 17.9mn salary savings accounts, 9.8mn new regular savings account rolled out in FY22, etc.

 Business Updates

Business Updates

  • Disbursed Rs1.46trn of home (and related) loans in FY22 commanding 35.3% market share amongst banks. New car loan journey on YONO was started for NTB customers and 13% of vehicle disbursements were from a pre-approved suite.
  • Bank has sanctioned 1.14mn digital personal loans amounting to Rs211bn during FY22.
  • Consumer durable loans - 11.1mn pre-approved customers for POS EMI and online EMI loans.
  • Slippages were curtailed at <1%; GNPAs settled at a decadal low of 3.97%; around 22 accounts with aggregate exposure of approximately Rs170bn (0.6% of advances) are proposed to be transferred to NARCL in phases.
  • With provision on security receipts (SR) of Rs78.6bn as of FY22, SRs are fully provided for. Of the gross restructuring of Rs329bn, 5.5% has slipped into NPA during FY22.
  • ~40% of investment portfolio is in AFS category. Bank appropriated Rs46.5bn in FY21 towards investment fluctuation reserves, thereby building reserves to 1.28% (vs 0.56% in FY21) of investments in AFS/HFT category.
  • No pending family pension liability; discount rate assumption for retirement benefits increased by 45bps in FY22.
  • As of FY22, YONO has set a record with 111.74mn downloads, 16.62mn logins in a day, 26k new digital savings bank accounts per day, and 48.35mn registered users. YONO-B platform is used by 1.75mn corporate users with a registered user base of 619k as of FY22. 139.4k 'new to digital' customers were onboarded till FY22 through the YONO business portal.
Maintain Buy for A Target Price of Rs 673/Share

Maintain Buy for A Target Price of Rs 673/Share

SBI exited FY22 with 13.9% RoE and 0.67% RoA aided by growth build-up, GNPAs at a decadal low, slippages at <1%, credit cost at 55bps and steady margin profile. Improved visibility on asset quality with 'new normal' credit cost of 1%, credit growth of 13%/15% for FY23E/FY24E, asset resolution and stable NIMs will drive RoE to >16% by FY23E/FY24E and valuations to 1.5x Sep'23E book. Maintain BUY with an unchanged target price of Rs 673.

State Bank Of India

State Bank Of India

State Bank of India (SBI) a Fortune 500 company, is an Indian Multinational, Public Sector Banking (PSB) and Financial services statutory body headquartered in Mumbai. SBI is the largest and oldest Indian Bank with 1/4th market share, serves over 45 crore customers through its vast network of over 22,000 branches, 62617 ATMs/ADWMs, 71,968 BC outlets, with an undeterred focus on innovation, and customer-centricity.

The Bank has successfully diversified businesses through its various subsidiaries i.e SBI General Insurance, SBI Life Insurance, SBI Mutual Fund, SBI Card, etc. It has spread its presence globally and operates across time zones through 229 offices in 31 foreign countries.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

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