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Axis Securities Report
The brokerage firm Axis Securities has recommend a Buy on State Bank of India and has set a target price of Rs 1,280/share, implying an upside of 28% from the current market price. The brokerage has made minor tweaks to its earnings estimates factoring in FY26 numbers.
After a strong overall performance in FY26, SBI enters FY27 from a position of structural strength with the ability to maintain 1% RoA, pristine asset quality, restored capital buffers, and an accelerating digital transformation, even as near-term net interest margin pressure and deposit mobilisation, particularly current account and savings account trajectory, warrant close monitoring.
Asset quality metrics continue to remain at multi-decadal lows, with limited stress visibility in both domestic and overseas portfolios, while expected credit loss transition is also expected to remain non-disruptive.
The brokerage expects SBI to deliver a healthy credit/deposit/NII/earnings growth of 14/11/15/9% CAGR over FY26-28E, while maintaining a consistent RoA delivery of 1%.
The stock currently trades at 1.1x FY28E ABV (core book), and Axis Securities believesSBI's current valuations are reasonable.
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