Brokerage Opinion: Estimate of target price of SBI Bank and Federal Bank shares
In a bullish move, top brokerages like Axis Direct and SBI Securities have recommended buying shares of SBI Bank and Federal Bank for the next 12-18 months. Let’s dive into the details and understand why these bank stocks are catching the attention of investors.
SBI Bank: A Solid Long-Term Bet
Axis Direct has given a ‘Buy’ rating to SBI Bank with a target price of Rs 1,030. The current market price of the stock is around Rs 818, which means there is a potential upside of over 26% from the current levels.
Axis Direct believes that SBI Bank’s profitability and growth trajectory are well-supported by its comfortable Loan-to-Deposit Ratio (LDR), healthy Provision Coverage Ratio (PCR), adequate capitalization, and improved asset quality outlook. The brokerage expects SBI Bank to maintain its net interest margins at around 3.2% in the medium term.
Federal Bank: A High-Potential Private Sector Lender
SBI Securities has recommended buying Federal Bank stock for the next three months, suggesting an entry range of Rs 193-197. The brokerage has set a target price of Rs 215, implying an upside potential of up to 10% from the current market price of Rs 195.5.
Federal Bank has a strong network of 1,504 branches and 12,015 ATMs. As of March 2024, the bank’s deposits stood at Rs 2.1 lakh crore, while its advances were at Rs 2.5 lakh crore. The business update for Q1 FY25 has been healthy, with the retail segment, a high-margin business, showing strong growth.
SBI Securities expects Federal Bank’s asset quality and margins to improve further. The bank’s valuation is also attractive, trading at a Price-to-Book (P/B) ratio of 1.3 times the estimated FY25 levels.
Axis Bank and Canara Bank: Other Promising Picks
Axis Securities has also given a ‘Buy’ rating to Axis Bank, with a target price of Rs 1,215-1,240 and a stop loss at Rs 1,180. Vikas Sethi of Sethi Finmart recommends buying Canara Bank with a target of Rs 116 and a stop loss at Rs 110.
These recommendations suggest that the banking sector, particularly SBI Bank, Federal Bank, Axis Bank, and Canara Bank, are expected to deliver strong returns in the coming months. Investors should carefully analyze these stocks based on their risk appetite and investment horizon.
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
