Jefferies Maintains Buy Rating on SBI Stock with ₹1,300 Price Target

SBI shares rise as Jefferies reiterates buy rating and sets a price target of ₹1,300 per share, implying a potential upside of around 28 per cent from the previous close.

Jefferies Maintains Buy Rating on SBI Stock

State Bank of India (SBI) shares rose 1.6 per cent in early trade on Monday after Jefferies reiterated its buy rating on the stock and set a price target of ₹1,300 per share.

The stock traded at ₹1,029.45 on the NSE at 12.15 pm, after hitting an intraday high of ₹1,034, compared with its previous close of ₹1,017.15.

Transition to ECL Framework: A Potential Risk Factor

Jefferies said the transition to the expected credit loss (ECL) framework remains a potential risk factor, although it does not expect the change to materially alter its broader investment thesis on the lender.

Market Impact and Details

• Jefferies expects SBI’s loan book to grow at a compound annual rate of 13 per cent and forecasts a return on equity (ROE) of 14 per cent over the medium term.
• The brokerage also sees valuation support for the stock, noting that SBI is currently trading at 1.4 times its FY27 adjusted book value.
• According to Jefferies, sustaining net interest margins (NIMs) will depend largely on SBI’s ability to reprice its corporate loan book.

Key Takeaways

• Jefferies maintains a buy rating on SBI stock with a price target of ₹1,300 per share.
• The brokerage expects SBI’s loan book to grow at a compound annual rate of 13 per cent and forecasts a return on equity (ROE) of 14 per cent over the medium term.
• SBI is currently trading at 1.4 times its FY27 adjusted book value.

FAQs

What is the price target set by Jefferies for SBI stock?

Jefferies has set a price target of ₹1,300 per share for SBI stock.

What is the expected growth rate of SBI’s loan book?

Jefferies expects SBI’s loan book to grow at a compound annual rate of 13 per cent.

What is the return on equity (ROE) forecast by Jefferies for SBI over the medium term?

Jefferies forecasts a return on equity (ROE) of 14 per cent for SBI over the medium term.

Conclusion

Despite concerns about the transition to the expected credit loss (ECL) framework, Jefferies remains constructive on SBI’s outlook. The brokerage cited the bank’s consistent improvement in deposits per branch, lower reliance on priority sector lending certificates (PSLCs), growing fee income from bancassurance partnerships, and limited buffer provisions as key positives. Investors are advised to consider Jefferies’ buy rating and price target of ₹1,300 per share for SBI stock.