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Shares of State Bank of India, the country's top lender, rose as much as 3.4 per cent to Rs 344.60, making it the top percentage gainer on the NSE index.
Robust growth in other income coupled with contained operating expenses helped State Bank of India report a net profit of ₹1,582 crore in the second quarter against a net loss of ₹557 crore in the year-ago quarter.
In a sign that the pressure on asset quality is easing, fresh slippages in the reporting quarter were about a third of what they were in the preceding quarter.
“While volatility in non-perfomring loans (NPL) could persist, we are near the end of NPL recognition cycle and recovery/resolution will be key,” analysts at Jefferies wrote, raising their price target on SBI to Rs 385 from Rs 325 with a “buy” rating.
“We expect asset quality trend to remain stable except for a couple of bulky stressed names, and we expect the bank to continue to ramp up provision coverage,” Nomura analysts wrote, also raising their price target to Rs 385 from Rs 300 with a "buy" rating.
33 of the 42 analysts covering SBI stock rate it as “buy", 5 "hold” and 4 “sell"; their median PT is Rs 340, according to Thomson Reuters data.
Shares of SBI gained about 33 per cent this year, up to Friday's close.
(With inputs from Reuters)
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