SBIN - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.3
| Stock Code | SBIN | Market Cap | 9,85,876 Cr. | Current Price | 1,068 ₹ | High / Low | 1,090 ₹ |
| Stock P/E | 13.8 | Book Value | 561 ₹ | Dividend Yield | 1.49 % | ROCE | 6.37 % |
| ROE | 17.3 % | Face Value | 1.00 ₹ | DMA 50 | 1,003 ₹ | DMA 200 | 904 ₹ |
| Chg in FII Hold | 0.77 % | Chg in DII Hold | -0.61 % | PAT Qtr | 16,666 Cr. | PAT Prev Qtr | 19,160 Cr. |
| RSI | 61.2 | MACD | 17.7 | Volume | 76,77,292 | Avg Vol 1Wk | 1,30,01,334 |
| Low price | 680 ₹ | High price | 1,090 ₹ | PEG Ratio | 0.45 | Debt to equity | 12.0 |
| 52w Index | 94.7 % | Qtr Profit Var | -9.09 % | EPS | 83.1 ₹ | Industry PE | 7.88 |
📊 Analysis: SBIN (State Bank of India) presents strong fundamentals with ROE at 17.3% and EPS at 83.1 ₹, making it a compelling candidate for long-term investment. The P/E of 13.8 is slightly above the industry average of 7.88, but the PEG ratio of 0.45 indicates undervaluation relative to growth. Dividend yield of 1.49% adds passive income potential. Technical support lies around 1,000 ₹ (DMA 50) and 900 ₹ (DMA 200). The ideal entry zone is 950–1,020 ₹ for margin of safety. For existing holders, a 3–5 year horizon is favorable, with partial profit booking near 1,080–1,100 ₹ resistance if valuations stretch.
✅ Positive
- Large market cap of 9,85,876 Cr. ensures financial stability.
- High ROE of 17.3% supports long-term compounding.
- PEG ratio of 0.45 indicates attractive valuation relative to growth.
- Dividend yield of 1.49% provides steady income.
- FII holdings increased by 0.77%, showing foreign investor confidence.
⚠️ Limitation
- ROCE at 6.37% is relatively weak compared to ROE.
- Debt-to-equity ratio of 12.0 highlights leverage risk typical of banks.
- DII holdings decreased by -0.61%, showing reduced domestic confidence.
- Quarterly profit variation at -9.09% indicates earnings volatility.
📉 Company Negative News
- Sequential decline in quarterly PAT (16,666 Cr. vs 19,160 Cr.).
- High leverage structure may limit flexibility in downturns.
📈 Company Positive News
- Consistent long-term profitability with strong EPS (83.1 ₹).
- Improved foreign institutional participation.
- Stock trading near 52-week high (94.7% of range), reflecting investor optimism.
🏭 Industry
- Banking sector remains a backbone of India’s economy.
- Industry P/E at 7.88 suggests SBIN trades at a premium, justified by scale and leadership.
- Structural drivers: credit growth, digital banking adoption, and rising retail participation.
🔎 Conclusion
SBIN earns a rating of 4.3 due to strong ROE, undervaluation on PEG, and stable dividend yield. Long-term investors can consider entry in the 950–1,020 ₹ zone for margin of safety. Current holders should maintain a 3–5 year horizon, with partial profit booking near 1,080–1,100 ₹ resistance. Despite leverage risks, SBIN remains a solid candidate for long-term compounding in the banking sector.