SBIN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.4

🏦 State Bank of India (SBIN) demonstrates strong profitability, attractive valuation, and institutional confidence, though high leverage and technical overextension suggest caution for fresh entries.

📈 Positive

• 💰 Attractive Valuation: P/E of 11.8 is well below the industry average of 7.98, offering value.
• 📊 Strong Profitability: ROE of 17.3% and quarterly PAT of ₹19,160 Cr. reflect robust earnings power.
• 📉 Institutional Confidence: DII holdings increased by 2.11%, and FII holdings rose by 0.24%.
• 📈 EPS Strength: ₹81.8 supports long-term earnings visibility.
• 💸 Dividend Yield: 1.70% offers consistent income for shareholders.

⚠️ Limitation

• 📉 High Leverage: Debt-to-equity ratio of 12.8 is typical for banks but still a risk factor.
• 📉 Technical Overextension: RSI at 74.9 and MACD at 22.1 suggest overbought conditions.
• 📉 ROCE Constraint: ROCE at 6.37% is modest compared to non-banking peers.
• 📉 Volume Dip: Current volume slightly below weekly average, indicating reduced momentum.

📉 Company Negative News

• Stock trading near 52-week high, raising short-term valuation concerns.
• Overbought RSI may signal potential for technical pullback.

📈 Company Positive News

• Consistent quarterly profit growth with a 12.5% increase in PAT.
• Strong credit growth and asset quality improvement support long-term outlook.
• Positive sentiment from both domestic and foreign institutional investors.

🏭 Industry

• Banking sector benefits from rising credit demand, digital adoption, and economic recovery.
• Industry P/E of 7.98 reflects conservative valuation norms.
• Peers include ICICI Bank, HDFC Bank, and Bank of Baroda.

🧾 Conclusion

• 📉 Entry Zone: ₹880–₹910 could be a favorable accumulation range post RSI cooling.
• 📈 Long-Term View: Hold for 3–5 years; strong fundamentals and sector leadership support sustained growth.
• 🔍 Valuation Edge: Reasonable pricing with upside potential if macro tailwinds persist.