With banks leading the ongoing bull run on Dalal Street from the front, state-run PSU lender (SBI) saw the most number of target price upgrades recently.
Out of the 38 analysts with a coverage on SBI, which reported its highest-ever quarterly profit after tax (PAT) of Rs 13,264.62 crore in Q2, at least 10 of them have upgraded their target prices in the last one month, Trendlyne data shows. The average targets signal an upside potential of over 14%.
SBI is also a consensus buy on Dalal Street with no sell ratings, only 2 hold recommendations and 36 buy ratings.
, another consensus pick with 26 buy calls, earned 8 target price upgrades amid optimism over 5G and tariff hikes in a consolidated telecom market. The stock is up around 21% year-to-date (YTD).
Despite winning 8 upgrades, the shares of pharma major Lupin are still down over 20% this year. Similarly, despite 6 upgrades, shares of
are down over 14% YTD.
The list of most upgrades includes
, , , , M&M and Cipla.
What should investors do?
Both domestic as well as foreign institutional investors (FIIs) have been bullish on banks. As against a 7% gain for Nifty in 2022, the banking index has rallied over 21% during the period.
“We maintain the investment thesis that we are still early in the credit cycle currently and visibility of a sharp deterioration in asset quality appears to be low. We believe that the tier-2 banks such as public sector and regional banks have better upside than the frontline banks,” Kotak Institutional Equities said.
While Kotak has buy ratings on SBI,
, , Axis Bank, DCB Bank, and , global brokerage BofA Securities prefers PSU banks.
“We see BOB continuing to lead the PSB turnaround story beyond SBI on a more diversified/safer book and a more advanced digital strategy. We still remain positive on SBI (Neutral) but see narrowing scope for positive surprises,” BofA analyst Anand Swaminathan said.
After the September quarter earnings, Ambit Capital upgraded IOCL, Trent, Zomato,
and while downgrading BPCL, , HPCL, Voltas and .
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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