Ahead of elections, there are five PSU bank stocks that are top picks of Motilal Oswal. These are top lenders backed by government, who have potential of double-digit upside ahead. One of them is also going to split for the first time ever in the ratio of 1:5. These PSU lenders are SBI, Indian Bank, Canara Bank, Union Bank Of India, and Bank of Baroda.
State Bank of India (SBI): (CMP: Rs 751.90, Potential Upside: 14.4%)
On the largest PSU stock of India, the leading brokerage has set a target price of Rs 860 apiece, with buy recommendations.
YTD, SBI shares have rallied by over 17%. In six months, the stock advanced by 30.5%, while in a year, the surge is is over 38%.
On April 16, Fitch Ratings affirmed State Bank of India's (SBI) Long-Term Issuer Default Rating (IDR) at 'BBB-'. Fitch has also affirmed the bank's Viability Rating (VR) at 'bb' and its Government Support Rating (GSR) at 'bbb-'. The outlook on the SBI's rating remains Stable.
SBI, the largest Indian Bank with 1/4th market share, serves over 48 crore customers through its vast network of over 22,405 branches, 65,627 ATMs/ADWMs, 76,089 BC outlets, with an undeterred focus on innovation, and customer centricity, which stems from the core values of the Bank - Service, Transparency, Ethics, Politeness and Sustainability.
Bank Of Baroda: (CMP: Rs 254.70, Potential Upside: 22%)
Motilal Oswal has recommended BUY on Baroda Bank for a target price of Rs 310. YTD, Baroda Bank's shares have gained by 8.9%, while in six-months, the upside is of 23%. In a year, BoB shares have zoomed by 44.5%.
Founded on 20th July, 1908 by Sir Maharaja Sayajirao Gaekwad III, Bank of Baroda is one of the leading commercial banks in India. At 63.97% stake, it is majorly owned by the Government of India. The Bank serves its global customer base of ~165 million through over 70,000 touch points spread across 17 countries in five continents and through its various digital banking platforms, which provide all banking products and services in a seamless and hassle-free manner.
For this PSU lender, Motilal Oswal has recommended buy for a target price of Rs 650 apiece. YTD, the stock has zoomed by 32%, while in a year, the stock surged by 96.28%.
This PSU bank is also set to split its shares for the first time ever. Earlier, in February, Canara Bank received board of directors approval for stock sub-division of its equity shares. The bank's share will split in the ratio of 1:5, meaning 1 equity shares of Rs 10 face value each will be split into 5 equity shares of Rs 2 each.
Founded in July 1906, Canara Bank has been scaling up its market position to emerge as a major Financial Conglomerate with as many as thirteen subsidiaries/sponsored institutions in India and abroad. As of December 31, 2023, the Bank has 9585 Number of Branches, out of which 3095 are Rural,2742 Semi Urban,1906 Urban & 1842 Metro along with 10463 ATMs. Bank is also having 3 Overseas Branches in London, New York & Dubai.
4. Union Bank Of India: (CMP: Rs 143.20, Potential Upside: 22.2%):
For Union Bank, the brokerage has also maintained buy for a target price of Rs 175. YTD, Union Bank shares have gained by 18.5%. While in a year, the stock is up by 96.03%.
Union Bank of India is one of the leading public sector banks of the country. Currently, the bank has a network of 8450+ domestic branches, 9800+ ATMs, 76,300+ employees and 18,900+ BC Points .The Bank's total business as of 31st December 2023 stood at Rs. 2,068,429 crore, comprising Rs. 1,172,455 crore of deposits and Rs. 8,95,974 crore of advances.
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