MarketsMOJO Upgrades SBI to 'Buy' Rating: Strong Lending Practices and Growth Drive Positive Outlook

State Bank of India (SBI), one of the largest public banks in India, has recently received a 'Buy' rating from MarketsMOJO on November 4, 2024. This upgrade comes as a result of the bank's strong lending practices and low Gross NPA ratio of 2.76%.
In addition, SBI has shown healthy long-term growth with an annual net profit growth rate of 55.79%. The bank has also reported positive results in the June 2024 quarter, with the lowest Gross NPA ratio of 2.21%, highest DPS of Rs 13.70, and highest credit deposit ratio of 76.49%.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on November 4, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock.

Furthermore, SBI has a high institutional holding of 34.82%, indicating that these investors have better capabilities and resources to analyze the fundamentals of the company compared to retail investors.

In terms of performance, SBI has not only outperformed the BSE 500 index in the last 3 years, 1 year, and 3 months, but it has also generated a return of 43.54% in the last 1 year. With a market cap of Rs 7,32,265 crore, SBI is the biggest company in the sector and constitutes 43.78% of the entire sector. Its annual sales of Rs 430,681.19 crore also make up 37.13% of the industry.

However, there are some risks to consider when investing in SBI. With a ROA of 1.1, the stock has an expensive valuation with a 1.9 price to book value. It is also currently trading at a premium compared to its average historical valuations. Additionally, while the stock has generated a return of 43.54% in the past year, its profits have only risen by 8.8%, resulting in a PEG ratio of 1.3.

Overall, with its strong fundamentals, positive technical outlook, and market-beating performance, SBI is a promising stock to consider for investment. However, it is important to carefully assess the risks before making any investment decisions.