State Bank of India (SBI) shares soared nearly 5% to an all-time peak on Monday . The country's largest lender reported a record quarterly profit and said credit expansion is expected to remain in double-digits .
BENGALURU (BENGALURU): After the country's largest lender reported a record quarterly profit and said credit expansion is expected to remain in double-digits, shares of State Bank of India (SBI) soared nearly 5% to an all-time peak on Monday.SBI's shares increased 4.8 percent to a record high of 622.70 rupees in early trading, extending a recent rally that saw the stock gain about 17% since mid-October, accounting for about half of the stock's increase so far this year.According to Refinitiv results, at least 25 of the 40 brokerages covering the stock have raised their price targets since SBI's results over the weekend, raising the median target to 700 rupees from about 660 rupees.According to Refinitiv results, the lenders' net income increased 74% to $1.61 billion in the September quarter.
SBI's net interest margin (NIM), a key indicator of profitability, increased in the quarter, but gross non-performing assets (NPAs) decreased sequentially to 3.52% from 3.91%.In a note on Sunday, Emkay Research analyst Anand Dama posted a best-in-class quarter, estimating higher-than-industry credit growth of 20% over a year ago.In the current fiscal, the lender says it expects credit growth of 14 percent to 16 percent, with the expectation that treasury investment will continue to decrease.A positive surprise was a substantial improvement in asset quality (measured by NPAs). Analysts are largely positive on the stock, with not one recommending it to sell and only one rating it hold.According to Refinitiv results, the remaining 39 analysts rate SBIs at the level of buy or sell.SBI's shares were up 3.7 percent at 0510 GMT, bringing their year’s gains to 33.7%, well below the 4.9 percent increase in the blue-chip Nifty 50 index.