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Investing.com - Investec (LON:INVP) has raised its price target on State Bank of India (NSE:SBI) (NS:SBIN) to INR940.00 from INR920.00 while maintaining a Buy rating on the stock.
The price target adjustment follows State Bank of India’s healthy first quarter performance, which showed a return on assets (RoA) of 1.14% and profit after tax (PAT) rising 12.5% year-over-year to Rs 192 billion. The bank’s net interest income remained flat year-over-year at Rs 411 billion but was supported by higher treasury income of Rs 63 billion and lower operational expense growth of 8% year-over-year.
State Bank of India reported strong deposit growth of 12% year-over-year, driven by current account growth of 31% and term deposit growth of 14%. Loan growth reached 12% year-over-year in Q1, with management expressing confidence in continued robust growth based on improving liquidity and a strong corporate loan pipeline of Rs 7.2 trillion, up from approximately Rs 3.4 trillion in Q4.
Asset quality metrics showed improvement, with management stating they do not see asset quality concerns in any segments. Based on these results, Investec has revised its FY26/27E PAT estimates upwards by 3% and 1% respectively.
Investec values State Bank of India’s core bank at 1.1x June 2027 forward book value per share, compared to 1.2x March 2027 forward previously, and considers it a preferred public sector undertaking pick due to its stable asset quality and strong return on assets delivery.
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