Top MF pick of July approaches 52-week high; here are target prices
Stock analysts said demand is gradually picking up from Q2 onwards, and the bank is also re-looking at growth in certain segments it had placed on the back burner earlier.
- Aug 20, 2025,
- Updated Aug 20, 2025 1:53 PM IST
Mutual funds (MFs) poured over Rs 10,000 crore into the country’s largest state-run lender in July, making it their biggest stock bet of the month. The stock, sixth in market capitalisation rankings, rose 4 per cent in July and now trades just 5 per cent away from its 52-week high of Rs 831.50, touched in December last year. Analysts remain upbeat, with 29 ‘Strong Buy’, five ‘Buy’, six ‘Hold’ and only one ‘Strong Sell’ rating on the counter.
This is State Bank of India (SBI). Data showed MFs bought 10,200 crore worth 12.80 crore SBI shares in July, taking their total holding to 125.80 crore shares from 113 crore shares in June.
The PSU bank largely met Q1 earnings expectations on net interest income (NII) while beating estimates on pre-provision operating profit and profit after tax, aided by higher forex gains and lower operating expenses and provisions. Analysts believe the stock still is quoting at cheap valuations.
Axis Secuities said SBI has seen strong growth in the Home Loans and SME segments and expects the momentum to continue. That said, the growth in the Xpress credit segment has been muted for the past few quarters and the bank has seen stress emerging amongst the low net income government employee customer segment, owing to over-leveraging.
This led SBI to consciously slow down the pace of growth.
That said, the demand is gradually picking up from Q2 onwards, and the bank is also re-looking at growth in certain segments it had placed on the back burner earlier, Axis Securities said.
"The higher prepayments, a common phenomenon in a declining rate cycle in the corporate portfolio, have been a growth dampener. The bank has let go of an opportunity of Rs 12,000 crore, citing unfavourable risk-reward. Additionally, a few large corporates have tapped the CP market, where rates are attractive, denting the corporate book by another Rs 16,000-18,000. SBI though expects double-digit corporate growth to resume from Q2 onwards," Axis Securities said.
The SBI management has continued to guide for 12-13 per cent growth in advances for FY26. The bank is making concentrated efforts to contain Opex growth by focusing on improving productivity and maintaining the C-I Ratio.
Systematix Institutional Equities maintained its ‘Buy’ with a slightly revised target of Rs 1,020 (vs Rs 1,027 earlier), valuing the standalone bank at 1.1 times FY27E book value and subsidiaries at Rs 293 per share.
IIFL Securities lifted its FY26–28 PAT estimates by 1–3 per cent to factor in the recent Rs 25,000-crore capital raise. Its revised target price of Rs 930 implies a 16 per cent upside, valuing SBI at 1.05 times June 2027 core P/B and assigning Rs 260 per share for subsidiaries. “Valuations are cheap at 0.9 times FY27 core P/B for average RoA/RoE of 1 per cent/13.5 per cent,” it said.
"Asset quality does not pose challenges, and thus, credit costs should remain benign. Collectively, this should ensure a comfortable 1 per cent RoA delivery over FY26-28E. The recent QIP has strengthened the Tier I capital, adequate to fuel medium-term growth," Axis Securities said while suggesting a target price of Rs 1,025 apiece.
Motilal Oswal (MOFSL) said Q1 PAT beat estimates by 13 per cent on strong treasury gains and controlled opex. While NII declined 4 per cent sequentially and NIM contracted 10 bps QoQ to 2.9 per cent, it expects margins to recover from 3QFY26. MOFSL raised earnings by 3–3.5 per cent for FY26–27 and reiterated ‘Buy’ with a target of Rs 925 (1.2 times FY27E ABV).
Antique Stock Broking retained a Rs 955 target, rolling forward valuations to September 2027, with standalone bank valued at 1.17 times P/B and subsidiaries at Rs 253 per share. It highlighted SBI’s continued market-share gains in credit and deposits, stable asset quality, and margin levers from unsecured credit and CASA growth.
Mutual funds (MFs) poured over Rs 10,000 crore into the country’s largest state-run lender in July, making it their biggest stock bet of the month. The stock, sixth in market capitalisation rankings, rose 4 per cent in July and now trades just 5 per cent away from its 52-week high of Rs 831.50, touched in December last year. Analysts remain upbeat, with 29 ‘Strong Buy’, five ‘Buy’, six ‘Hold’ and only one ‘Strong Sell’ rating on the counter.
This is State Bank of India (SBI). Data showed MFs bought 10,200 crore worth 12.80 crore SBI shares in July, taking their total holding to 125.80 crore shares from 113 crore shares in June.
The PSU bank largely met Q1 earnings expectations on net interest income (NII) while beating estimates on pre-provision operating profit and profit after tax, aided by higher forex gains and lower operating expenses and provisions. Analysts believe the stock still is quoting at cheap valuations.
Axis Secuities said SBI has seen strong growth in the Home Loans and SME segments and expects the momentum to continue. That said, the growth in the Xpress credit segment has been muted for the past few quarters and the bank has seen stress emerging amongst the low net income government employee customer segment, owing to over-leveraging.
This led SBI to consciously slow down the pace of growth.
That said, the demand is gradually picking up from Q2 onwards, and the bank is also re-looking at growth in certain segments it had placed on the back burner earlier, Axis Securities said.
"The higher prepayments, a common phenomenon in a declining rate cycle in the corporate portfolio, have been a growth dampener. The bank has let go of an opportunity of Rs 12,000 crore, citing unfavourable risk-reward. Additionally, a few large corporates have tapped the CP market, where rates are attractive, denting the corporate book by another Rs 16,000-18,000. SBI though expects double-digit corporate growth to resume from Q2 onwards," Axis Securities said.
The SBI management has continued to guide for 12-13 per cent growth in advances for FY26. The bank is making concentrated efforts to contain Opex growth by focusing on improving productivity and maintaining the C-I Ratio.
Systematix Institutional Equities maintained its ‘Buy’ with a slightly revised target of Rs 1,020 (vs Rs 1,027 earlier), valuing the standalone bank at 1.1 times FY27E book value and subsidiaries at Rs 293 per share.
IIFL Securities lifted its FY26–28 PAT estimates by 1–3 per cent to factor in the recent Rs 25,000-crore capital raise. Its revised target price of Rs 930 implies a 16 per cent upside, valuing SBI at 1.05 times June 2027 core P/B and assigning Rs 260 per share for subsidiaries. “Valuations are cheap at 0.9 times FY27 core P/B for average RoA/RoE of 1 per cent/13.5 per cent,” it said.
"Asset quality does not pose challenges, and thus, credit costs should remain benign. Collectively, this should ensure a comfortable 1 per cent RoA delivery over FY26-28E. The recent QIP has strengthened the Tier I capital, adequate to fuel medium-term growth," Axis Securities said while suggesting a target price of Rs 1,025 apiece.
Motilal Oswal (MOFSL) said Q1 PAT beat estimates by 13 per cent on strong treasury gains and controlled opex. While NII declined 4 per cent sequentially and NIM contracted 10 bps QoQ to 2.9 per cent, it expects margins to recover from 3QFY26. MOFSL raised earnings by 3–3.5 per cent for FY26–27 and reiterated ‘Buy’ with a target of Rs 925 (1.2 times FY27E ABV).
Antique Stock Broking retained a Rs 955 target, rolling forward valuations to September 2027, with standalone bank valued at 1.17 times P/B and subsidiaries at Rs 253 per share. It highlighted SBI’s continued market-share gains in credit and deposits, stable asset quality, and margin levers from unsecured credit and CASA growth.