State Bank of India (SBI) remains in upbeat mood ahead of its December quarter results, with its shares surging 8.45 per cent in the intraday to hit 52-week high of Rs 337.4 on the Bombay Stock Exchange. SBI board is scheduled to meet on February 4 to approve financial results of the bank for the quarter and nine months ended December 31, 2020.
In the last five sessions, the stock of India's largest public sector lender has gained 20.35 per cent as compared to 5.8 per cent rise in the benchmark S&P BSE Sensex. SBI share price has gained 72 per cent in last three months, while it has rallied 125 per cent as compared to its 52-week low of Rs 149.55 touched on April 22, 2020.
According to market analysts, SBI is well-positioned to ride the economic recovery, while its undemanding valuation, stable liability profile, and expected sharp improvement in risk-adjusted returns augurs well for the stock.
On Tuesday, shares of SBI opened higher at Rs 314.70 against previous closing price of Rs 311.10 on the back of strong volume. As much as 77.06 lakh shares changed hands over the counter as compared to 24.11 lakh shares on the BSE. The m-cap of the BSE index heavyweight surged to Rs 2,97,368.06 crore.
Brokerage firm Emkay Global Financial Services has given a buy rating for the stock with a target price of Rs 340, 21 per cent upside in the next 12 months. "SBI is well-positioned to ride the economic recovery and further consolidate market share. Over the years, SBI has gained market share vs. other PSBs in credit and deposits given its unparalleled franchise network/outreach, better management pedigree with strategic focus on key business/profit drivers and disruptive pricing power," says Emkay research.
Global brokerage Goldman Sachs has also raised its 12-month SOTP (Sum-of-the-Parts Valuation)-based target price to Rs 383 from Rs 367, citing its strong retail positioning, along with value unlocking potential from its digital app YONO. The YONO, which is expected to be hived off into a separate subsidiary, is estimated to be worth nearly $20 billion-$50 billion for SBI (1.2x-3x of SBI's current standalone market cap), it said.
Another brokerage, Macquarie also raised its target price on SBI from Rs 308 to Rs 360, citing reduction in cost of equity by 100bp which would result in increase in target multiple by 27 per cent to 0.74x.
Meanwhile, SBI has announced the launch of its unique 4-day shopping carnival - 'YONO Super Saving Days', exclusive for over 34 million YONO users. Commencing on the 4th of February, the four days shopping extravaganza which is concluding on the 7th is all set to offer an exclusive range of discounts and cashback to the users of SBI's banking and lifestyle platform, YONO.