SBI vs BoB vs PNB: The State Bank of India (SBI) declared its Q1 results 2024 on Saturday, reporting a marginal rise in net profit due to higher provisioning. After the announcement of SBI Q1 results 2024, three central PSU banks — SBI, Punjab National Bank (PNB), and Bank of Baroda (BoB) — have declared their first quarter results for the current financial year. As the Indian stock market is trading down due to the renewed fear of the US recession and rising tension in the Middle East, long-term investors may find choosing either of these shares tricky.
Comparing Q1 results 2024 of the three central PSU banks, Tapan Doshi, SEBI Registered Analyst and Founder of Thoughtful Investors Hub, said, "When we compare SBI, PNB & BOB Q1FY25 results, SBI is on strong footing compared to the other two PSU Banks. In the last twenty years, SBI has had the lowest credit costs and an impressive RoE of 17.3%, which has happened to be the highest since FY 2005. The loans grew by 15% YoY while the slippages were controlled at 70 bps, showing a good asset quality and exciting valuation. PNB reported an increase in earnings by 160% YoY due to lower provisions, but it's 0.8% RoA and 12% RoE. But, it's important to note that the run-up in stock prices by 100% in one year makes it more expensive."
"BOB, on the other hand, achieved a modest increase in earnings of 10% accompanied by low slip postings at 1%, a stable asset quality record of 8% YoY growth, and a 15% RoE and ROA ratio of 1.1%. To sum up, SBI Leads, followed by BOB, while PNB comes last due to concerns about its valuation updates," said Tapan Doshi.
Speaking on the SBI share price outlook, Sumeet Bagadia, Executive Director at Choice Broking, said, “In the wake of the stock market crash, I suggest buying SBI shares at around ₹790 to ₹800 apiece for the short-term target of ₹860 and ₹900. However, one must maintain a strict stop loss at ₹760 while taking any fresh buying position in SBI shares.”
On the outlook for BoB share price, Bagadia said, “Bank of Baroda shares can be bought or accumulated in ₹230 to ₹220 apiece range maintaining stop loss at ₹210 per share mark. On trend reversal, we can expect the PSU bank stock to touch ₹270 to ₹280 per share target in the short term.”
Sumeet Bagadia of Choice Broking said the Nifty PSU Bank Index is under pressure today due to the stock market crash following weak global cues on US recession fear. He said that geopolitical tension in the Middle East and the US-China trade war are also reasons for weakness in global markets.
“The Nifty PSU Bank index has strong support at 6,400 to 6,500 while the index faces resistance at 7,100. A bullish or bearish trend can be assumed on the breakage of either side. Till then, investors are advised to maintain a buy-on-dips strategy,” Bagadia said.
The Indian stock market benchmarks, the Sensex and the Nifty 50 crashed up to 3 percent in early trade on Monday, August 5, mirroring the global trend after fears of a US recession mounted and rising tensions in the Middle East kept investors on edge.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
