SBI shares rise as brokerages see upside after profit growth
State Bank of India reported a 15 per cent year-on-year increase in standalone net profit for the second quarter.
Shares of State Bank of India (SBI) gained 2 per cent to Rs 988 on the BSE on Wednesday, according to The Economic Times. The price rise followed the lender reporting a 15 per cent year-on-year growth in standalone net profit to Rs 23,038 crore in the second quarter, up from Rs 20,160 crore in the same quarter last year.
The bank's loan book crossed Rs 52 lakh crore during the quarter. Operating profit rose 7 per cent year-on-year to Rs 34,226 crore, while interest income increased 10 per cent to Rs 1.32 lakh crore. Interest expenses grew by 8 per cent to Rs 82,876 crore.
Jefferies maintained a Buy rating on SBI with a target price of Rs 1,320, implying a 34 per cent upside. The brokerage noted the bank's gross non-performing loan (NPL) ratio was 1.4 per cent and the specific coverage ratio remained stable at 74 per cent.
Motilal Oswal also maintained a Buy rating, revising its target price to Rs 1,225, suggesting a 26 per cent upside. The brokerage noted earnings benefited from one-off gains from the sale of a stake in SBI Mutual Fund.
Emkay Global Financial Services retained its Buy rating with a target price of Rs 1,350, seeing a 39 per cent upside. The brokerage attributed net interest margin expansion to lower deposit costs and improved CASA balances.