Should you buy SBI shares despite miss on margins? What brokerages say

economictimes.indiatimes.com:

SBI) in the June quarter earnings, a clutch of brokerages remain optimistic about its prospects and reiterated their buy view on the stock. Foreign brokerage Jefferies noted that asset quality is holding up for the PSU bank while Kotak Institutional Equities sees a limited downside and called SBI its top pick in the space. Nuvama maintained its buy on strong asset quality though it put NIMs and loan growth as key monitarables for the counter.

The stock fell 0.7% to the day's low of Rs 569.20 on the NSE. India's largest lender State Bank of India (SBI) on Friday beat Street expectations by reporting a 178.24% year-on-year (YoY) jump in its June 2023 quarter profit at Rs 16,884 crore. An ET Now poll had pegged the bottomline estimate at Rs 15,000 crore.

This was the highest-ever net profit for the fourth quarter in succession for SBI. SBI's net interest income (NII) in Q1FY24 rose 24.7% YoY to Rs 38,905 crore during the quarter while domestic net interest margin increased 24 bps YoY to 3.47%. The state-owned bank's gross NPA reduced to 2.76% vs 2.78% quarter-on-quarter (QoQ) and 3.9% YoY.Here is what brokerages recommended:Jefferies: Buy | Target: Rs 760Jefferies has reiterated its buy on SBI shares and put a price target of Rs 760.

The June quarter earnings were a tad weaker than Jefferies' estimates with NIMs dragging the topline and operating profits. The loan growth moderated from highs with CASA growth lagging, too. The asset quality is holding up well, the brokerage said.Kotak Institutional Equities: Buy | Target: Rs 725Kotak maintains a buy for a future value of Rs 725 which was unchanged.