Emkay global financial service Ltd., a domestic brokerage agency has increased its target price on SBI, stating that India’s largest lender is now in a favorable position to drive the economic recovery and further consolidate market share. The present market price of SBI is Rs.281 per share. The brokerage agency has a mark of 12-months to achieve the target of Rs.340 per share of SBI, which is a 21% upside from the existing level share price. Over the years, SBI has earned market share vs. other PSBs in credit and deposits due to its unmatched franchise network/outreach, stronger management pedigree with a strategic emphasis on core business/profit factors and disruptive pricing capacity,” says Emkay Study.
Since last year, SBI has seen a slowdown in credit growth, with the latest reading being 6 percent a year, mostly attributable to the slackness in corporate demand and the effect of Covid-19 on retail credit growth, which had otherwise been growing high. It is mostly due to the lack of demand for the sector and the effect of Covid-19 on the development of retail credit, otherwise rising only strongly in the long term.
However, after it has been announced, retail growth is turning marginally towards pre-Covid-19 peaks, powered by home loans in which SBI has an improved leadership role and auto loans, where it has simply made deep inroads into SBI by aggressive pricing. The bank also anticipates a resurrection of corporate credit
The brokerage revised the bank’s FY22/23 credit growth forecasts from 8%/12% to 10% /1%.
In the last two months, SBI’s share price has risen by 4%.
Since FY18, SBI’s GNPA has slowly decreased to 5%. This is the lowest and much better than that of ICICI among PSBs. The SBI primarily remains self-funded and is assisted by the clear enhancement of core profitability and unlocking of value in subsidiaries, which are advancing steadily in terms of market share in their respective business regions.