Kotak increases target price of SBI; downgrades Canara, Union and PNB – here’s why

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₹760, while maintaining the ‘buy’ tag. The brokerage firm has also named SBI as its most preferred stock in the PSU sector. “Given the relative strength of SBI as a franchise (demonstrated over the last credit cycle), we now recommend owning it over other PSU banks.

We now recommend SBI (retain BUY) as our preferred stock within the PSU bank space," Kotak said in its report. Also read: Nomura predicts 12% increase in Nifty this year; what will drive the rally? The firm further added, “ We do not think we have any evidence to change this thesis. SBI, in our view, has demonstrated that its franchise has been better than other PSU banks peers in terms of through-the-cycle credit cost, liability franchise, asset franchise as well as digital/technological enhancements.

Hence, we prefer to now go back to recommending SBI over the other PSU banks." Meanwhile, the brokerage firm has downgraded — PNB to ‘Reduce’, Union Bank and Canara Bank to ‘Add’. “ We maintain BUY on SBI and ADD on BOB, but downgrade Canara (ADD), Union (ADD) and PNB (REDUCE). We roll over our Fair Values to base in March 2026 BVPS while maintaining the same pecking order – SBI (~1.2X), BOB (~1.0X) and the rest (Canara, Union and PNB) at ~0.9X.," it said.

Also read: SEBI permits short-selling across all categories, F&O stocks also eligible Over the previous month, SBI, Bank of Baroda, Canara Bank, and Union Bank of India have experienced notable increases ranging from 6% to 11%, outperforming the 8% uptick in the Nifty PSU bank index. Investors have taken notice of the PSU banks' commendable reduction in slippages, accompanied by a decline in gross non-performing assets (GNPAs), contributing to their positive performance. “Asset quality for PSU banks has seen