Shares of State Bank of India (SBI) hit a more than three-month high of Rs 590.10 in intraday trade on Tuesday, rising 1.4% ahead of its January-March quarter (Q4FY23) earnings report. The largest state-owned company is scheduled to report its fourth-quarter results on Thursday, May 18, 2023. The stock hit an all-time high of Rs 629.65 on December 15, 2022.
SBI is trading at its highest level since January 25, 2023. Over the past month, the stock has soared 8.5%, outperforming the market. In comparison, the S&P BSE Sensex and Nifty50 rose 3.8%, while the Nifty PSU Bank Index gained 4.2% during the period.
SBI is India’s largest public sector bank with a strong retail portfolio and the best operating metrics in the PSU banking segment. The bank has witnessed continued improvement in asset quality as well as a healthy PCR.
Analysts said a high proportion of floating-rate loans supporting the margin trajectory, continued healthy growth and asset quality, coupled with room to unlock value from larger subsidiaries, remain key fundamental strengths for SBI.
Sharekhan believes that despite recent local/global macro concerns, the Indian banking sector is expected to remain resilient. It said that SBI is an industry agency that benefits from its strong liability franchise and continued favourable industry tailwinds.
SBI is attractive to the fast-growing Indian economy with healthy PCR, strong debt franchise, improved retail mix, better-rated corporate loans, maintained low credit costs and low slippage, and improved Asset Quality Matrix.
Meanwhile, in Q4FY23, SBI’s credit growth is expected to rise by 15% YoY to Rs 31,591 billion, building on strong growth of 18-20% in the past two quarters.