Stock To Buy: Motilal Oswal Recommends This Public Sector Bank For Strong 39% Return

Leading brokerage firm Motilal Oswal has a "Buy" on State Bank Of India (SBIN) with a target price of Rs 725 apiece. According to the given target price, the stock is likely to give up to 39% robust return if the stock is purchased at the current market price. SBIN is India's Largest bank. It is a leading large-cap public sector bank with a pan-India presence. It has a market capitalisation of Rs 4,67,917 crore.

SBIN's Stock Performance and Returns

The stock of SBIN is currently trading at Rs 521.75 apiece. It opened at Rs 522.20 apiece, while the previous close was Rs 521.85 apiece.

It traded its 52 week low on 20 June 2022 at Rs 430.70 apiece, and 52 week high on 15 December 2022 at Rs 629.55 apiece, respectively.

The stock jumped 1.35% in 1 week, and 1.59% in 1 month, respectively. It gained 6.25% in 1 year, 149.96% in 3 years and 117.16% in 5 years, respectively.

Margin outlook positive; Buy for a target price of Rs 725 apiece

According to the brokerage firm, SBIN's robust performance has been aided by strong loan growth, margin expansion and lower provisions. The improvement in its treasury performance (which supported other income) and controlled opex led to healthy growth in core PPOP. A high mix of floating loans, which will benefit from the re-pricing of MCLR loans, will continue to aid NII and earnings, even as the cost of deposits may see some increase. The asset quality performance remains strong with consistent improvements in headline asset quality ratios, while the restructured book remains under control at 0.9%. "We estimate SBIN to deliver RoA/RoE of 1.0%/17.2% by FY25. We have a BUY rating on SBIN with a TP of INR725 (1.3x Sep'24E ABV and INR200 for its subsidiaries). SBIN is one of our preferred picks in the sector," the brokerage has said.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.