SBI stock climbs 33% in less than 3 months, Motilal Oswal sees further 15% upside; here's why
₹6 lakh crore, becoming the second PSU company, after Life Insurance Corporation, to achieve this milestone, as its upward trajectory continues. Also Read: SBI emerges as second PSU firm to surpass ₹6 lakh crore market cap Going forward, the stock is likely to maintain its upward trajectory, according to the projections made by the domestic brokerage firm Motilal Oswal.
In its latest report, the brokerage highlights State Bank of India's (SBI) consistent strong performance for the past few years, achieving new profitability milestones such as surpassing ₹500 billion in PAT in FY23. It says that the bank has also made efforts to significantly strengthen its balance sheet and has a healthy provisioning coverage on its corporate book of 92%.
Motilal Oswal expects SBI to achieve 13–14% loan growth over FY23–26E, aided by an improved disbursement rate for sanctioned loans and a recovery in corporate demand. With a strong liability profile boasting one of the lowest domestic CD ratios at 66%, it believes the bank is poised for healthy balance sheet growth.
Also Read: Profit of Indian public sector banks surged by 40% in first nine months of FY24; check top performing lenders Asset quality metrics have been healthy owing to strong underwriting, improved financial position of borrowers, and continued deleveraging by the corporate sector. SBIN has thus seen a consistent decline in its NNPA ratio to 0.6%, while its coverage ratio is healthy at 74% (92% including TWOs).
Following residual wage provisioning, Motilal projects improved cost ratios in FY25, enhancing profitability and offsetting margin and credit cost normalisation impacts. Also Read: Paytm share price drops 5% to hit 52-week low as it confirms receiving ED notice
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