SBI shares post best performance since 2024: What's the reason?
What's the story
State Bank of India (SBI), India's largest lender, is witnessing a great performance. The bank's shares have gained 14% in February alone, marking a seventh consecutive month of gains. This is the best monthly performance for SBI since February 2024, when it had gained 17%. The stock has experienced a consistent upward trend since the announcement of its third-quarter results earlier this month.
Performance
SBI becomes 4th largest company by market cap
The bank's shares surged another 1.2% today, hitting a record high. SBI's market capitalization has now crossed ₹11.3 lakh crore, making it the fourth largest firm in India by market cap after Reliance Industries, HDFC Bank and Bharti Airtel. The stock has gained in nine of the last 11 trading sessions and only declined four times in the last four weeks (including a 5.5% fall on Union Budget day).
Financial outlook
SBI management raises credit growth guidance to 13-15%
Following its third-quarter results, SBI management raised its credit growth guidance to 13-15% from the earlier 12-14%. Chairman CS Setty told CNBC-TV18 that he sees the lender's Net Interest Margin (NIM) to be at 3% for the full financial year. He also said that the credit costs are likely to remain at 50 basis points.
Market reaction
Brokerages raise price targets
Post its Q3 results, several brokerages including Nomura, CLSA and Citi raised their price targets on SBI. Nirmal Bang has the highest target on the street for the lender at ₹1,424. Out of 49 analysts covering SBI, 42 have a "buy" rating while seven have a "hold" recommendation. Notably, no analyst covering SBI has given a "sell" rating.