SBI m-cap surpasses Rs 4-trillion mark ahead of June quarter results

State Bank India (SBI) joined the elite club of companies with Rs 4-trillion market capitalization (m-cap) on the BSE on Wednesday after its share price hit a new high of Rs 448.45 in the intra-day trade. The stock of the country's largest state-owned lender surpassed its previous high of Rs 444.35, touched on July 30, 2021.

The bank is scheduled to announce its Q1FY22 results later today. In the past three months, the stock has rallied 27 per cent as compared to a 12.4 per cent rise in the S&P BSE Sensex.

SBI has become the fourth bank after HDFC Bank, ICICI Bank and Kotak Mahindra Bank to achieve this milestone. At 09:42 am, the stock erased its intra-day gain and was trading 0.10 per cent lower at Rs 446, with an m-cap of Rs 3.980 trillion. SBI stood at number eightth position in the overall m-cap ranking, BSE data shows.

Analysts expect SBI to report a healthy performance, supported by recoveries and modest opex. Earlier, the stock had hit an all-time high of Rs 442 on June 3, 2021, after it reported a strong set of numbers for the March 2021 (Q4FY21) quarter.

Brokerages find SBI better placed (with respect to asset quality, capitalisation, and underwriting strength, among others) compared to peers, with unique business strengths (being the largest bank in India).

SBI could report a healthy set of numbers for Q1FY22, supported by recovery from United Breweries Group’s stake sale and lower interest income reversals, say analysts. They are pencilling-in a year-on-year rise in net profit between 33 per cent and 63 per cent.

“SBI is entering financial year 2021-22 (FY22) from a position of strength, with better asset-quality and provisions/capital buffers. The bank will be one of the biggest beneficiaries of lumpy corporate resolutions and setting-up of Asset Reconstruction Company (ARC). We like SBI among PSBs for its strong liability profile, high retail orientation, reasonable capital position, and sharply improving RoA/RoRWA/RoE, given renewed focus on profitability while maintaining market dominance and portfolio quality,” analysts at Emkay Global Financial Services said.

State Bank of India