State Bank of India (SBI) shares dropped over 5% in intraday trade on Monday, i.e. 5 August, after the lender’s June quarter results announced on Friday prompted brokerage houses to slash their price targets for the stock.
At 11:30 am, shares of SBI were trading at Rs 294.65, down 4.5%, on BSE after hitting an intra-day low of Rs 291.70. Notably, BSE Bankex was also trading lower by 2.5%, while the Nifty PSU bank index was down 3.5%. Meanwhile, the S&P BSE Sensex was down nearly 800 points in afternoon trade.
Brokerages like Jefferies, CLSA, Citi, Kotak and IDFC cut their 12-month price target on SBI shares due to the elevated stress on the bank’s balance sheet. However, most of them remained bullish on the stock.
CLSA gave a ‘buy’ call on the SBI stock, but cut its target price to Rs 380 per share from Rs 420 earlier. Citi also gave a ‘buy’ call on the stock, while reducing its target price to Rs 400 per share from Rs 415 earlier.
Jefferies slashed SBI’s price target to Rs 370 per share. Kotak also maintained a ‘buy’ call on the stock, but cut its target to Rs 390 per share from Rs 410 earlier.
IDFC Securities maintained 'outperform' rating citing SBI’s inexpensive valuation, while cutting target price to Rs 365 per share.
SBI, on Friday, had reported net profit of Rs 2,312 crore in the June quarter as against the loss of Rs 4,875.85 crore in the corresponding quarter last year. However, gross slippages during the quarter increased sharply by 116% quarter-on-quarter to Rs 16,212 crore, leading to an increase in slippage ratio to 2.83% in the June quarter, from 1.39% in the previous March quarter.
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