State Bank of India in line with the breakout on the Nifty Bank has hit a fresh life time high of Rs. 471.9 per share. As per experts, the current run in the SBI stock is owing to the approval of Rs. 36,000 crore guarantee by the government for receipts issued by the NARCL or National Asset Reconstruction Company as an element of the bad loan resolution plan. The short term target for the scrip is Rs 500 per share.
Analyst opinion on SBI stock:
"Financials of SBI is already strong and after the announcement of Government of India's (GoI's) guarantee for security receipts issued by NARCL, SBI is going to emerge major beneficiary of this GoI move. This rally should be seen in the wake of this bad bank announcement made by the GoI yesterday and it will have long-term impact on the bank. Positional buyers can buy SBI shares for long-term once there is a dip in this counter", said Head of Research at Profitmart securities.
"SBI hits its fresh all-time high along with Bank Nifty after recent developments of relief package for telecom and bad bank announcement. The overall outlook is very bullish for SBI as it is the strongest bank in the PSU space whereas it has better fundamentals compared to most of the private banks. It is trading at 1.5 P/B, which is very attractive as compared to big private banks like HDFC and Kotak Mahindra Bank. Investors are advised to stick with SBI in the PSU basket to create good wealth as the outlook is looking very bullish for this bank on the back of significant improvement in asset quality, strong NII growth, and value unlocking through its subsidiaries", iterated Head of Research at Swastika Investmart Ltd.
For buying the scrip, positional buyers can enter the scrip at Rs. 460 as the huge profit booking in the counter is expected, and keep on accumulating the scrip till it is above Rs. 440. The stock is seen to scale to Rs. 500 in 3 months time, nevertheless you should place stop loss at Rs. 440.
Charts indicate that after a consolidation spanning nearly 10 years and the pattern depicted is similar to 2003 when then the stock moved 10 times in the next 5 years.