State Bank of India downgraded to 'Hold' by MarketsMOJO, but remains a strong player in the public bank industry

State Bank of India, one of the largest public banks in India, has recently been downgraded to a 'Hold' by MarketsMOJO on 2024-11-13. This decision was based on various factors, including the company's strong lending practices with a low Gross NPA ratio of 2.76%. Additionally, the company has shown healthy long-term growth with an annual net profit growth rate of 54.33%.
Moreover, State Bank of India has declared positive results for the last three consecutive quarters, with its Gross NPA(Q) being the lowest at 2.13%, DPS(Y) being the highest at Rs 13.70, and INTEREST EARNED(Q) being the highest at Rs 113,870.56 crore. The stock is also technically in a mildly bullish range, with multiple factors such as MACD, KST, and OBV being bullish.

Furthermore, the company has high institutional holdings at 34.82%, indicating that these investors have better capabilities and resources to analyze the fundamentals of companies compared to most retail investors. State Bank of India has also shown market-beating performance in the long term, generating 39.05% returns in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

With a market cap of Rs 7,37,531 crore, State Bank of India is the biggest company in the public bank sector, constituting 44.34% of the entire sector. Its annual sales of Rs 443,172.95 crore make up 37.72% of the industry. However, with a ROA of 1.1, the stock has an expensive valuation with a 1.7 price to book value. Nevertheless, it is currently trading at a fair value compared to its average historical valuations.

In the past year, while the stock has generated a return of 39.05%, its profits have only risen by 13.4%. The PEG ratio of the company is 0.8, indicating that it is currently undervalued. Overall, State Bank of India remains a strong player in the public bank industry, with positive results and a promising future.