Emkay Global Retains Buy On PSU Banking Stock, Board Recommends 1130% Dividend, Jumps 276% In 3 Yrs

Emkay Global has placed a Buy on State Bank Of India (SBI) with a target price of Rs. 700 apiece. The brokerage sees a potential upside of 22% from its current level. SBI in their Board meeting held on May 18, 2023, recommended a dividend of Rs. 11.30 per equity share i.e. 1130% for the financial year ended 31st March 2023.

SBI is India's leading public sector lender with presence across India. It is a large cap banking stock having a market capitalisation of Rs. 5,13,299 crore.

Recommends Dividend

The company said in an exchange filing in 18th May 2023, "The Central Board of the Bank, at its Meeting held on 18th May, 2023, has declared a Dividend of Rs. 11.30 per equity share (1130%) for the financial year ended 31st March, 2023. The date of payment of Dividend is fixed on 14th June, 2023 and the dividend warrants will be dispatched before the date of payment, which will be payable, in India, at par at all branches of State Bank of India, irrespective of the amount."

Outlook and valuations

HDFC Securities said, "Despite slower growth, we raise our earnings estimates for FY24, factoring-in the higher treasury gains and lower LLP. Bank has delivered its decadal-best RoA, of 1%, and RoE of 18% in FY23; we expect it to deliver 1% RoA and 16-18% RoE over FY24-26E, without building-in any capital raise. We roll-forward our TP on FY25E ABV, valuing the standalone bank at 1.3x now vs 1.4x Dec-23E ABV, factoring-in the lower growth which, coupled with subsidiaries'/investment value of Rs180/share (vs Rs206 earlier), leads to a TP of Rs700/share (vs Rs715 earlier). We retain BUY on SBI."

Stock Outlook

The stock on NSE last traded at Rs. 575.15 apiece, up 0.17% from its previous close of Rs. 574.20 apiece. Its 52 week high is Rs. 629.55 apiece, and the 52-week low is Rs. 430.70 apiece, respectively. The stock has given 6.45% return in 1 month. In the last 1 year, it has given 28.53%. It has given 276.41% positive return in 3 years. In 5 years, it has given 140.8% positive return.

Disclaimer - The stock has been picked from the brokerage report of Emkay Global. 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.