State Bank of India's Shares Hit Record High On "Best-In-Class" Results

Shares of State Bank of India (SBI) climbed nearly 5% to an all-time high on Monday after the country's largest lender reported a record quarterly profit and said it expects credit growth to remain in double-digits.

SBI's shares rose as much as 4.8% to a record high of 622.70 rupees in early trading, continuing a recent rally that has seen the stock gain roughly 17% since mid-October, accounting for about half of its surge so far this year.

At least 25 of the 40 brokerages covering the stock have raised their price targets since SBI's results over the weekend, lifting the median target to 700 rupees from about 660 rupees, Refinitiv data showed.

The lender's net profit surged 74% to 132.64 billion Indian rupees ($1.61 billion) in the September quarter, crushing estimates of 105.30 billion rupees, according to Refinitiv data.

SBI is "firing on all cylinders," ICICI Securities analyst Kunal Shah wrote in a note.

Besides the record profit, SBI's net interest margin (NIM), a key indicator of profitability, improved in the quarter, while gross non-performing assets (NPAs) fell sequentially to 3.52% from 3.91%.

SBI reported a "best-in-class" quarter, clocking higher-than-industry credit growth at 20% from a year earlier, Emkay Research analyst Anand Dama wrote in a note on Sunday.

The lender said it expects credit growth of 14% to 16% in the current fiscal, expecting treasury investment to unwind.

"Significant improvement in asset quality (measured by NPAs) was a positive surprise. The bank looks well placed to gain on the margin front in the current upward rate cycle," Nirmal Bang analyst Nikhil Shah said in a note.

Analysts remain overwhelmingly bullish on the stock, with not one of them recommending it a "sell" and only one rating it "hold." The remaining 39 analysts rate SBI's shares the equivalent of "buy" or "strong buy," Refinitiv data shows.

SBI's shares were last up 3.7% at 0510 GMT, taking their gains for the year to 33.7%, easily outperforming the 4.5% increase in the blue-chip Nifty 50 index.

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