State Bank of India (SBI) is the largest and oldest bank in India with a history of over 200 years. SBI has a vast network of 22,225 branches and approximately 62,730 ATMs across the country. SBI also has around 72,168 business correspondent outlets. With a market share of 22.15% in deposits and 19.70% in advances, SBI serves a customer base of approximately 45.2 crore customers.
You’ll get a detailed analysis of SBI’s share price target by 2025 in this article. We’ll do fundamental and technical analysis along with other factors to help you make an informed investment decision.
What is the SBI Share Price Target By 2025?
SBI bank stock is currently trading at Rs 580 to Rs 600 price levels. According to HDFC Securities’ analyst opinions, the consensus price target for SBI Bank’s shares by 2025 is around Rs. 730 to Rs. 740.
Based on the current financial performance and growth prospects of SBI Bank, analysts suggest that you may see significant share price growth in the future if the bank continues to enhance its financial position and successfully implement its growth strategies.
Price targets for SBI Bank are determined by analyzing both fundamental and technical aspects of the bank’s performance.
You can also read our other article on Yes Bank’s share price target, to assess Yes Bank’s future price.
Fundamental Analysis of SBI Stock
You can assess SBI’s potential share price target, let’s delve into its fundamental analysis and financial performance in recent years. Let’s start with Earnings and then we’ll discuss the loan business.
#1. Earnings of SBI (EPS)
In the last quarter, SBIN earned 18.71 INR per share, which was higher than the estimated 16.90 INR per share. This resulted in a positive surprise of 10.73%. The company’s revenue for the same period reached 543.54 billion INR, surpassing the estimated figure of 520.53 billion INR.
#2. Loan Business
SBI is not only the largest bank, but it is also the leader in handling government business. In the fiscal year 2019-2020, SBI had a turnover of around 52,50,000 lakh crores and earned commissions of approximately 3,700 crores from government-related transactions.
When you look at the types of loans that SBI provides, 40% of their total loans are given to individual customers, such as for buying a house or other personal needs. Corporate loans make up 36% of their portfolio and are given to businesses. SME loans, which are for small and medium-sized enterprises, account for 14% of their loans. Lastly, agriculture loans make up 10% of their lending.
If we focus on retail loans, which are loans for individual customers, the majority, or 68%, are for home loans. The remaining 32% of retail loans are divided among other types, such as express credit, auto loans, personal gold loans, and more.
SBI maintains a diversified loan book across various sectors as shown in the tables below –
I. SBI Loan Portfolio by Sector:
| Sector | Percentage of Loan Book |
|---|---|
| Home Loans | 23% |
| Infrastructure | 15% |
| Services | 12% |
| Agriculture | 10% |
II. Corporate Advances:
| Rating Grade | Percentage of Corporate Advances |
|---|---|
| A and better | Approximately 75% |
| PSUs & Government Departments | 38% |
#3. Other Factors
After analyzing business and financial performance, let’s have a look at other crucial fundamental factors –
- Revenue Growth: SBI has consistently grown over the past five years, with an average annual growth rate of 9%. The stable growth rate indicates a positive trend and a strong revenue generation capability.
- Profitability: SBI’s profitability has improved significantly, with outstanding net profit growth of 76%% from 2018 to 2022. SBI has shown effective cost management and improved operational efficiency.
- Asset Quality: The bank has made considerable progress in managing its non-performing assets (NPAs). The gross NPA ratio has decreased from 1.02% in 2022 to 0.67% in 2023, showcasing SBI’s commitment to enhancing its asset quality.
Technical Analysis of SBI Stock
To complement our fundamental analysis, let’s examine SBI’s stock price trends using technical indicators:
Moving Averages: The 50-day moving average (553) for SBI’s stock price has consistently remained above the 200-day moving average (550), indicating a bullish trend. This suggests potential price appreciation in the coming years.
Relative Strength Index (RSI): SBI’s stock has consistently maintained an RSI above 50, indicating a strong buying momentum. This suggests positive investor sentiment and a potential upward movement in the share price.
Factors Affecting SBI’s Share Price
Consider both internal and external factors that can influence SBI’s share price in the coming years:
- Loan Portfolio Growth: SBI’s robust loan portfolio growth, driven by retail and corporate lending, can contribute to increased interest income and overall profitability.
- Digitalization Efforts: SBI’s focus on digital transformation and innovative banking solutions can enhance customer experience, drive operational efficiency, and attract new customers.
- Economic Conditions: Monitor macroeconomic factors such as GDP growth, inflation rates, and interest rate movements. Favorable economic conditions can stimulate borrowing and lending activities, positively impacting SBI’s financial performance.
- Regulatory Environment: Stay updated on regulatory changes, such as banking reforms and policies, as they can affect SBI’s operations, capital requirements, and compliance costs.
Conclusion
According to current analyst opinions, the consensus price target for SBI Bank’s shares by 2025 is around Rs. 700 to Rs. 725. Stay informed about SBI’s performance, monitor market trends, and remain proactive in analyzing relevant factors. By combining thorough research, analysis, and expert advice, you can make well-informed investment decisions that align with their objectives.
You can also read about other stocks’ target prices –
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- IRCTC Share Price Target
- Tata Steel Share Target Price
- Suzlon Share Price Target
- Wipro Share Price Target
Frequently Asked Questions
According to HDFC Securities, SBI can reach Rs 740 per share. The share is expected to achieve a 14% Compound Annual Growth Rate (CAGR) in loans from fiscal year 2022 to 2025. This, coupled with expanding margins and reduced credit costs, is projected to help the bank achieve a Return on Assets (ROA) of 0.9% and a Return on Equity (ROE) of 17% by fiscal year 2024.
SBI holds the largest market share among Indian banks, accounting for approximately 20% of total deposits and advances in the country. It is recognized as a leading player in the banking sector.
SBI’s financial performance has been promising, with consistent revenue growth, improved profitability, and effective management of non-performing assets. These factors contribute to a positive outlook for the bank.
SBI’s growth drivers include its expanding loan portfolio, digitalization initiatives, and diversification into ancillary financial services such as insurance and wealth management. These strategies can provide additional revenue streams and fuel growth in the future.
Like any investment, there are risks associated with investing in SBI. Some key risks include changes in interest rates, regulatory challenges, asset quality deterioration, and macroeconomic uncertainties. It is important for investors to assess these risks and make informed decisions based on their risk tolerance.
