SBI, BoB, Canara: 5 PSU Bank Stocks To Buy, Motilal Top Picks; 1 To Split In 5 Shares For First Time Soon

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.

3. Canara Bank: (CMP: Rs 583.75, Potential Upside: 11.4%)

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.