3 weeks ago
SBI Shares Hit Three-Month Low Despite Broker Buy Call
SBI shares have been falling and reached their lowest level in three months.
The shares touched Rs 979.90 during the current trading session.
The bank’s total market value fell to Rs 9.04 lakh crore.
One concern is that banks may face higher costs when protecting themselves against currency changes linked to FCNR(B) deposits.
These extra costs could make investors less confident about the stock.
However, Axis Securities still recommends buying SBI shares.
It believes SBI has strong finances, good asset quality and growing business opportunities.
The brokerage gave the stock a target price of Rs 1,280.
It also expects SBI’s business and earnings to grow over the next few financial years.
State Bank of India shares fell to a three-month low of Rs 979.90 during the current session.
The lender’s market capitalization declined to Rs 9.04 lakh crore.
Higher hedging costs for FCNR(B) deposit-related dollar liabilities may have weakened investor sentiment.
Axis Securities maintained a buy recommendation and set a price target of Rs 1,280.
Axis expects SBI to post strong credit, deposit, net interest income and earnings growth through FY26-28E.
- Who
- State Bank of India and Axis Securities.
- What
- SBI shares declined to a three-month low, while Axis Securities retained its buy recommendation.
- Where
- India.
- When
- During the current trading session; Axis Securities’ projections cover FY26-28E.
- Why
- Investor sentiment may have been affected by expected 15-20 basis-point increases in FCNR(B) deposit-related hedging costs for Indian banks.
Market Concerns
Broker Optimism
Near-term costs
Market Concerns
FCNR(B) deposit-related dollar liabilities could require separate hedging, with costs for Indian banks expected to rise by 15-20 basis points beyond committed interest costs.
Broker Optimism
Axis Securities believes SBI’s strong capital position, improving efficiency and robust asset quality can support its performance despite near-term concerns.
Share-price outlook
Market Concerns
SBI shares were below their five-day through 200-day moving averages and fell to a three-month low, indicating sustained market weakness.
Broker Optimism
Axis Securities retained its buy recommendation and set a Rs 1,280 target, citing SBI’s dominant franchise and growth momentum.
Future growth
Market Concerns
Higher forward-premium-related hedging costs could weigh on sentiment toward Indian banks.
Broker Optimism
Axis expects SBI to benefit from economic growth and increasing participation in renewable energy, data centres and semiconductors.
Key facts
- Three-month low
- Rs 979.90 per SBI share
- Market capitalization
- Rs 9.04 lakh crore
- Broker recommendation
- Axis Securities maintained a buy rating
- Broker price target
- Rs 1,280
- Expected credit CAGR
- 14% over FY26-28E
- Expected deposit CAGR
- 11% over FY26-28E
- Expected NII and earnings CAGR
- 15% and 9%, respectively, over FY26-28E
Sources
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