State Bank of India (SBI) has surged nearly 70% over the past year, narrowing its long-standing valuation gap with private sector peers HDFC Bank and ICICI Bank. Analysts say SBI’s fundamentals remain strong, but with valuations now closer to fair value, investors face a choice: buy, hold, or book profits.
The State Bank of India (SBI) has delivered a remarkable 70% rally in the past year, driven by robust earnings, strong credit growth, and improved asset quality. This surge has significantly narrowed the valuation gap with private sector leaders HDFC Bank and ICICI Bank, which traditionally commanded premium multiples.
Market experts note that SBI’s rally has been supported by consistent performance in retail lending, corporate credit, and digital banking initiatives. The bank’s improved profitability and reduced non-performing assets have boosted investor confidence.
However, analysts caution that with valuations now closer to fair value, the scope for further sharp upside may be limited. SBI has even overtaken ICICI Bank in market capitalization, becoming India’s second-largest bank after HDFC Bank.
Key Highlights:
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Stock Performance: SBI up 70% in the past year.
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Valuation Impact: Gap with HDFC Bank and ICICI Bank narrows.
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Market Cap: SBI overtakes ICICI Bank, now second-largest in India.
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Growth Drivers: Strong credit growth, improved asset quality, digital push.
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Investor Dilemma: Analysts suggest SBI is fairly valued; upside may be capped.
The rally underscores SBI’s transformation into a competitive force against private peers, but investors must weigh whether to hold for stability or book profits at current levels.
Sources: The Economic Times, Goodreturns, Business Standard