SBI share price rose in early trade today after Citi raised target price for the state-owned lender. Share of SBI was the top gainer on both Sensex and Nifty in early trade. The large cap stock gained up to 2.28% to Rs 337.40 compared to the previous close of Rs 329.85 on Sensex. On Nifty, SBI stock rose 2.31% to Rs 337.50 against previous close of Rs 329.85. Citi raised target price of the stock from Rs 375 to Rs 400 and cited higher value for SBI Life and higher multiple on core banking business.
The brokerage maintained a buy call on the stock and said merger of its associate banks should provide leverage to gain market share. The banking stock has gained after three days of fall. SBI share price has gained 15.45% during last one year and gained 14% since the beginning of this year.
4.07 lakh SBI shares changed hands on BSE amounting to Rs 13.66 crore turnover on BSE. The stock has gained 28.53% after Q2 earnings of the public sector lender were announced on October 25 this year. The earnings were announced during market hours that day.
On October 24, the stock closed at Rs 262.50 and hit an intra day high of Rs 337.40 today. The country's largest lender reported over three-fold jump in September quarter profit, despite higher provisions. The bank posted a 218 per cent year-on-year growth in its net profit at Rs 3,011.73 crore for the second quarter ended September 30, 2019, helped by higher net interest income and improvement in asset quality.
The lender had posted net loss of Rs 944.87 crore in the same quarter last year. The public sector lender's net interest income (NII), which is the difference between interest earned and interest expended, rose 17.67 per cent to Rs 24,600 crore in Q2FY20 versus Rs 20,906 crore in Q2FY19.
SBI's asset quality improved during September quarter with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - declining to 7.19 per cent versus 9.95 per cent in the previous year. Net NPA also fell to 2.79 per cent as compared to 4.84 per cent in the corresponding period last year. In absolute terms also, gross NPA has declined both Y-o-Y as well as sequentially, the bank said.
By Aseem Thapliyal
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