HDFC Securities has issued a buy recommendation for shares of the State Bank of India (SBI) on Monday, setting a target price of Rs 790 per share. This is a significant increase from the current Bombay Stock Exchange (BSE) rate of Rs 576.35 per share. The recommendation follows SBI's strong performance, with its shares having surged by 9% in the past year and a remarkable 194% over the last three years. Notably, the one-year price total return stands at 1.23% as per InvestingPro Data.
SBI, a government-backed Fortune 500 public-sector banking and financial services entity based in Mumbai, boasts over 200 years of heritage. The bank's robust financial health is underscored by its recent Q2 2023 standalone net profit, which witnessed a year-over-year growth of 178.24%, amounting to Rs 16,884.29 crore ($2.27 billion). This marks the fourth consecutive quarter of record profits for the bank. The bank's revenue growth has been accelerating, with the latest figure standing at 5.67% according to InvestingPro Data.
Key contributors to SBI's success include its strong brand recognition, scale, prolific sourcing edge, and effective cross-selling strategy. SBI's YONO-powered digital stack and lean distribution model have played substantial roles in its recent successes. It's worth noting that SBI is a prominent player in the Banks industry, as per InvestingPro Tips.
These impressive results have prompted HDFC Securities to revise their two-year forecast for SBI shares upwards by 6-8%. The revised target price is based on SBI's superior asset profile and a valuation at 1.4x March 2025 Adjusted Book Value Per Share (ABVPS). This aligns with the InvestingPro Tip that highlights SBI's high shareholder yield.
InvestingPro Tips also suggests that SBI has consistently increased its earnings per share and has raised its dividend for 3 consecutive years, which is a positive sign for potential investors. For more insightful tips on SBI and other companies, consider exploring the InvestingPro product which includes 16 additional tips for SBI. You can find more information here.
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