Nifty PSU Bank index jumped 2.8% to 4,377.25 today as the market mood remained positive despite mixed global cues. The NSE Nifty 50 rose 89.50 points or 0.46% to 19,412.05 and BSE Sensex soared 361.82 points or 0.55% to 65,566.87. All the banking and non-banking indices such as Bank Nifty, Nifty Financial Service and Nifty Private Bank were trading in green. The top gainers on Nifty PSU Bank were Punjab National Bank (PNB), Bank of India, Indian Overseas Bank, Punjab & Sind Bank and Indian Bank while there were no losers.
SBI, PNB, Bank of Baroda among preferred large PSU bank stocks
“Public banks have performed well post-COVID. The asset quality cycle tailwind has resulted in an improvement in NPA ratios. The corporate credit woes are behind us. Therefore we expect credit cost normalisation in the coming period. As per as growth is concerned, the PSU Banks are likely to report strong growth factoring in capex improvement. Large PSU Banks like SBIN (SBI) and BOB are also growing rapidly on the consumer credit front. Hence we expect further room for re-rating. Nevertheless, The ECL provision will be keenly watched. We prefer large PSU Banks; SBIN, BOB and PNB (considering the valuations),” said Ajit Kabi, Banking analyst at LKP Securities.
Brokerage call: Buy SBI
SBI – Buy – Target Price: Rs 650
“There is enough scale for the State Bank of India to expand its digital offerings and hence growth ahead. At the CMP, the scrip trades at P/ BV of 1.22x FY25E BVPS of Rs 463 and investors are advised to ‘BUY’ the scrip for a target of Rs 650,” said analysts at Ashika Stock Broking.