SBI remains the top pick for this brokerage: Key reasons behind strong outlook

Global brokerage Jefferies reiterates positive outlook State Bank of India (SBI) maintains a ‘Buy’ recommendation with a target price of ₹1,030 per share. The firm continues to see SBI as one of the most preferred in the banking industry.

This is supported by the bank’s resilient asset quality, strong earnings outlook and prudent financial strategy.

Jefferies emphasized: SBIs Asset quality is expected to remain good, fueling recoveries and boosting earnings in the second half of FY25.

This performance is remarkable at a time when the broader banking sector is facing challenges.

A key strength identified by Jefferies is SBI’s high share of loan-related loans. Marginal Cost of Funds-Based Lending Rate (MCLR).

This enables the bank to weather gradual policy rate cuts without having a significant impact on its net interest margin (NIM).

Adding to its appeal, SBI has no plans to raise capital or monetize its stake in subsidiaries, signaling a solid capital position and a long-term strategic approach.

The stock’s recent performance matches Jefferies’ optimistic stance.

On Friday, November 22, SBI shares were trading at ₹798.75, up more than 2% on the BSE.

This recovery follows a significant decline in the public sector banking space, with the Nifty PSU Bank index falling 5% in intraday trade on Thursday, its sharpest decline in over five months.

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