SBI shares at 52-week high. Experts predict further upside after strong third-quarter results

The State Bank of India or SBI share price hit a new 52-week high on Friday. 546.40 per share. SBI shares opened with a bullish spread of around 2 per share and hit a new 52-week high in early morning trading. However, profit taking quickly kicked in and bank stock came to an end 10.65 lower than its Thursday close of 540.10 levels each on NSE. However, after the strong SBI Q3 results, stock market experts see more gain in the banking sector.

According to stock market experts, the SBI share price could go up to 600 per share in the immediate short term while in the short and medium term it can go up to 650 per action level. They said that SBI does not have a liquidity problem and after the infrastructure-focused budget, PSU banks should benefit from the growing demand for liquidity in the infrastructure sector. As SBI is the leading lender in India, it is expected to make the most of this demand and hence its business volume is expected to further increase in the coming quarters. They advised investors to add this stock to their portfolio and hold it for the short to medium term.

Speaking on SBI’s share price outlook following SBI’s quarterly results; Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “SBI reported strong third quarter results, with its year-over-year net profit climbing around 62%. SBI announced a solid loan book and asset quality and the PS U bank has liquidity to meet the growing demand for credit lines from the infrastructure sector. After that, its subsidiaries SBI Card and SBI Life also posted strong third-quarter results. Thus, one can maintain the short and medium term counter at least while those who do not have this stock in their portfolio can also add SBI shares in their portfolio.

Echoing the views of Avinash Gorakshkar; Sumeet Bagadia, Executive Director of Choice Broking, said, “SBI shares look positive on the chart pattern. On Monday, if the stock opens 5 to 10 higher since its Friday close, then one can buy SBI shares at the current market price for an immediate short-term target of 580 to 600 keeping the stop loss at 525 levels each.”

In the FY22 third quarter results, SBI announced a 62% year-on-year increase in net profit to 8,431.9 crore. Its net interest income (NII) for the third quarter of fiscal year 2021-22 increased by 6.48% compared to the corresponding period of the previous fiscal year. Home loans, which account for 24% of SBI’s domestic advances, were up 11.15% from Q3FY21. In addition, the growth of the enterprise and small and medium-sized enterprises (SME) segment also accelerated during the third quarter.

Total bank deposits increased by 8.83% and savings bank deposits increased by 10.30% during the third quarter. Current account deposits increased by 7.89% compared to the corresponding period of the previous year.

Warning: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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