State Bank of India or SBI share price today hit new lifetime high of ₹471.90 apiece in early morning trade session. Extending its yesterday’s rally, SBI shares opened with an upside gap of ₹4.30 per equity share and went on to hit new lifetime high. According to stock market experts, this rally in SBI stocks is mainly due to the yesterday’s Union Cabinet’s clearance to the proposal of ₹30,600 crore government guarantee for security receipts issued by the National Asset Reconstruction Company (NARCL) as part of resolution of bad loans. They said that SBI will be the major beneficiary of this move and in next three months, this PSU banking stock may go up to ₹500 per stock levels.
Speaking on the reason for SBI share price rally; Avinash Gorakshkar, Head of Research at Profitmart securities said, “Financials of SBI is already strong and after the announcement of Government of India’s (GoI’s) guarantee for security receipts issued by NARCL, SBI is going to emerge major beneficiary of this GoI move. This rally should be seen in the wake of this bad bank announcement made by the GoI yesterday and it will have long-term impact on the bank. Positional buyers can buy SBI shares for long-term once there is a dip in this counter.”
Santosh Meena, Head of Research at Swastika Investmart Ltd said, “SBI hits its fresh all-time high along with Bank Nifty after recent developments of relief package for telecom and bad bank announcement. The overall outlook is very bullish for SBI as it is the strongest bank in the PSU space whereas it has better fundamentals compared to most of the private banks. It is trading at 1.5 P/B, which is very attractive as compared to big private banks like HDFC and Kotak Mahindra Bank. Investors are advised to stick with SBI in the PSU basket to create good wealth as the outlook is looking very bullish for this bank on the bank of significant improvement in asset quality, strong NII growth, and value unlocking through its subsidiaries.”
Echoing with Avinash Gorakshkar’s views; Rohit Singre, Senior Technical Analyst at LKP Securities said, “SBI shares have given a big breakout at ₹440 on closing basis and the stock looks extremely bullish on chart pattern. Those who have SBI stock in their portfolio are advised to further hold the counter maintaining stop loss at ₹440. However, if someone wants to buy this PSU banking stock, my advice is to wait as profit-booking is strongly awaited in this counter. One should buy this stock at around ₹460 and keep on accumulating till it is above ₹440. The stock may go up to ₹500 in next three month. However, one must maintain strict stop loss at ₹440 while taking this position in SBI stocks.”
Speaking on SBI share price targets; Santosh Meena of Swastika Investmart said, “Technically, SBI share has come out of 10 years of consolidation that may lead to a big move in this counter in coming years because the same pattern was formed in 2003 then stock moved 10 times in the next 5 years. However, on an immediate basis ₹475 to ₹500 area could act as an immediate supply zone but any correction in the counter should be seen as a good buying opportunity.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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