SBIN - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.2

📊 Core Financials Analysis

Profitability

Strong quarterly PAT of ₹19,600 Cr, though slightly down QoQ (−8.34%).

ROE: 17.2% — solid for a large-cap bank.

ROCE: 6.47% — typical for capital-intensive financial institutions.

Efficiency & Returns

EPS: ₹86.9 — robust earnings per share, supporting valuation.

Dividend Yield: 1.99% — attractive for income-focused investors.

Debt & Leverage

Debt-to-equity: 12.4 — high, but expected for a bank due to its lending model.

Leverage is not a red flag here; it's intrinsic to banking operations.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 9.51 Undervalued vs industry PE of 7.49, but still low for growth potential

P/B Ratio ~1.46 Reasonable for a PSU bank

PEG Ratio 0.32 Deeply undervalued relative to growth

Intrinsic Value Likely > ₹799 Based on earnings and PEG, stock trades below fair value

🧠 Business Model & Competitive Advantage

State Bank of India (SBIN) is India’s largest public sector bank with a vast branch network and diversified financial services.

Competitive moat includes

Government backing

Massive customer base

Strong brand trust

Access to low-cost deposits

Challenges include

Asset quality risks

Regulatory constraints

Slower innovation compared to private peers

📌 Entry Zone Recommendation

RSI: 42.5 — approaching oversold, good accumulation zone.

MACD positive — early bullish signal.

Support Range: ₹740–₹770 is a favorable entry zone.

Avoid chasing above ₹850 unless macro tailwinds or earnings surprise.

🕰️ Long-Term Holding Guidance

Ideal for long-term investors seeking stability, dividends, and gradual growth.

Hold and accumulate on dips, especially below ₹780.

Monitor NPA trends, credit growth, and interest rate cycles.

Could outperform in a rising rate environment due to net interest margin expansion.

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