SBIN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials Analysis

Profitability

ROE of 17.3% is strong, indicating efficient use of equity capital.

ROCE of 6.37% is modest, typical for large banks with heavy asset bases.

EPS of ₹81.8 supports a low P/E of 10.8, making SBI attractively priced relative to earnings.

PAT rose to ₹19,160 Cr from ₹18,643 Cr QoQ, showing consistent profit growth.

Balance Sheet Strength

Debt-to-equity ratio of 12.8 is high, but expected for banks due to their lending model.

Book Value of ₹527 vs Current Price ₹854 → P/B ratio ~1.62, which is reasonable for a large-cap bank.

Dividend yield of 1.86% adds income appeal.

Cash Flow & Stability

PEG ratio of 0.35 suggests SBI is undervalued relative to its growth.

RSI at 74.2 and MACD positive indicate strong bullish momentum, possibly overbought in the short term.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 10.8 Undervalued vs industry PE of 7.91

P/B Ratio ~1.62 Fairly priced

PEG Ratio 0.35 Attractive valuation

Intrinsic Value ~₹965

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Estimated ~13% above current price

SBI is undervalued based on intrinsic valuation models

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🏦 Business Model & Competitive Edge

Sector: State Bank of India is India’s largest public sector bank, with dominant market share in retail, corporate, and rural banking.

Strengths

Massive deposit base and low-cost funding advantage

Government backing ensures stability and access to capital

Expansive branch network and digital transformation initiatives

Challenges

Regulatory constraints may limit agility

Competition from private banks and fintechs could pressure margins

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SBI’s scale, trust, and infrastructure give it a durable moat, especially in underserved markets.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹800–₹830

Near 50 DMA (₹815) and 200 DMA (₹796)

RSI suggests short-term caution; wait for pullback before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and dividend yield support long-term compounding.

Accumulate on Dips: Especially near ₹800 for better margin of safety.

Watchlist Triggers

NPA trends and provisioning levels

Credit growth and net interest margins

Institutional buying and macro tailwinds

SBI is a cornerstone of India’s financial system, and its current valuation offers a compelling entry for long-term investors. You can explore deeper insights on AlphaSpread’s valuation dashboard or TopStockResearch’s fundamental analysis.

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