Shares of State Bank of India Ltd (SBI) hit fresh record high in Monday’s trade nd in the process it breached Rs 800-mark for the first ever. The stock gained amid a broad-based rally in banking shares after a couple of healthy quarterly earnings.
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Th PSU banking stock climbed 4.23 per cent to hit an all-time high of Rs 805.95.
Rajesh Palviya, Head Technical Research at Axis Securities lies State Bank of India (SBI) among PSU banks. “The stock could see Rs 820-830 levels in the next 2-3 days. One can maintain stop loss at Rs 750,” Palviya said.
The third largest lender rallied on a day Axis Bank pipped Kotak Mahindra Bank to become the fourth-largest lender in terms of market capitalisation (m-cap) following its March quarter results. Other bank stocks also gained, even, as Kotak Mahindra Bank shares plunged following the RBI ban on onboarding customers online and via mobile banking and also its ban on Kotak’s fresh credit card acquisitions.
For the March quarter, Axis Securities estimated SBI’s advances and deposits growth at 14 per cent and 11 per cent, respectively. Opex is likely to remain marginally higher to account for wage revision, though pre-provision operating profit may improve sequentially, the brokerage said.
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Earlier this month, Fitch Ratings said SBI’s business profile score is the highest among Indian banks, reflecting its view of SBI’s ability to generate business consistently through the cycle while managing risk better than peer state banks.
“It also reflects the competitive advantages of its dominant size and market share and unparalleled domestic reach that offset the sector’s limited pricing power. Still, government influence can weigh on SBl’s traditional business model – loans are about 60 per cent of assets -and even more so on its risk appetite, similar to other state banks,” it said.
Fitch Ratings talked about SBI’s advantage over peers in portfolio selection due to scale, brand loyalty and widespread presence. It said SBI’s bank’s appetite for risk has been higher than is typical for a bank with its market position – despite total loan growth slowing to 14.5 per cent YoY in 9MFY24 from 16 epr cent in the financial year ended March 2023 (FY23).
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Meanwhile, NSE recently announced a revision in the lot size for derivative contracts for 54 stocks including State Bank of India, which will be effective from April 26.
