SBI share price: Buy, sell or hold: What should investors do with SBI post June quarter results?

Most brokerage firms maintained their rating on (SBI) post June quarter results on healthy loan growth and stable asset quality.

Reacting to the results, shares of SBI fell over 2 per cent in morning trade.

Long-term investors can consider buying the stock now or on dips for a possible target of over Rs 600-650 in the next 12 months which translates into an upside of over 13-22 per cent from Rs 530 recorded on 5 August, suggested experts.

The net profit fell to Rs 6,068 crore in the quarter ended June 2022 from Rs 6,504 crore a year earlier as the bank booked a Rs 6,549 crore loss on its investments due to the deterioration in value during the quarter.

Bank reported healthy loan growth of 16 per cent on a YoY basis led by strong growth in the retail segment at 19 per cent on a YoY basis on account of home loans and personal loans growing at a healthy pace.

Overall asset quality remained stable with GNPA & NNPA ratios falling by 6 bps/2 bps QoQ to 3.91 per cent/1.0 per cent. PCR stable at 75 per cent.

We have collated a list of recommendations from top brokerage firms from ETNow:

Sharekhan: Buy| Target Rs 600| Upside 13%

Sharekhan maintained its buy rating on SBI post June quarter results with a target price of Rs 600 which translates into an upside of 13 per cent from Rs 530 recorded on 5 August.

SBI reported PAT at Rs 6,068 crore (down 7 per cent y-o-y / 33 per cent q-o-q) which was below consensus and our estimates mainly due to higher treasury losses of Rs 6,549 crore reported during the quarter, it said.

SBI trades at 1.0x and 0.8x its FY2023E and FY2024 core BV and remains our top pick among PSU bank`s basket, the brokerage said in a note.

Jefferies: Buy| Target Rs 630| Upside 18%

Jefferies maintained its buy rating on SBI post June quarter results with a target price of Rs 630 which translates into an upside of 18 per cent from Rs 530 recorded on 5 August.

“Loan growth improved to 15 per cent on a YoY basis on a lower base and a healthy 3 per cent QoQ rise. MTM losses were a drag on profit but can settle now,” it said.

We trim estimates a bit, but slippages remain stable, Jefferies added. “The global investment bank lowered its FY23E earnings by ~6 per cent to incorporate treasury losses.”

HSBC: Buy| Target 630| Upside 18%

HSBC maintained its buy rating on SBI post June quarter results with a target price of Rs 630 which translates into an upside of 18 per cent from Rs 530 recorded on 5 August.

Several levers have yet to play out and the global investment bank continues to estimate net interest margin (NIM) expansion over FY22-25e, it said.

It raised FY23-25e EPS by 3.2 per cent, 1.1 per cent and 0.6 per cent respectively, said the note.

Motilal Oswal: Buy| Target Rs 625| Upside 18%

maintained its buy rating on SBI post June quarter results with a target price of Rs 625 which translates into an upside of 18 per cent from Rs 530 recorded on 5 August.

Treasury drags behind, but earnings are set to soar, MOSL said. We have seen a decline in margin transitory, said the note. The asset quality improves in a seasonally weak quarter, added the note.

JPMorgan on SBI: Overweight| Target Rs 650 | Upside 25%

JPMorgan maintained its overweight rating on SBI post June quarter results with a target price of Rs 650 which translates into an upside of 22 per cent from Rs 530 recorded on 5 August.

“Growth is up and bonds are down. The net interest margins (NIMs) are down on a QoQ basis, but the full-year trajectory still looks up,” JP Morgan said.

Credit costs trend is below normal, it said, adding that the asset quality is robust which is a positive sign. Loan growth delivered a positive surprise, liquidity remains comfortable while capital raise needs to be seen, as growth has picked up, said the note.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)