As the broader markets took off on Thursday, the banking space was not left behind. The Nifty Bank index surged 0.63% to 48,494.95 and one of its constituents - State Bank of India (NS:SBI) which holds a weightage of 9.9% jumped 5.12% to a new all-time high closing of INR 812.
This is the largest public-sector bank in the country with a market capitalization of INR 6,89,961 crore, making it the 6th largest listed entity on the NSE.
As the stock jumped to a never-before-seen level it would be interesting to see till where it can rally. For that, let’s see the financial score of the stock in InvestingPro to gauge whether it is a portfolio stock or not. The score in this case is 3 out of 5, qualifying it for further analysis.
Image Source: InvestingPro+
To see the current momentum, we look at the price history of 3 months. In this time period, the stock is up 32.5% which is not at all bad for such a gigantic company. In fact, after such a run-up, the stock generally tends to take a breather before resuming the uptrend.
Image Source: InvestingPro+
In such high-momentum stocks, one concern that always persists is - whether the stock has rallied to its full potential or not. For this, we look at the valuation gap. The higher the gap, the better it is. In the case of SBIN, the fair value of the counter is INR 898 per share, depicting a good 10.6% upside potential from the CMP of INR 812.
Also, looking at the technical chart, the stock has just given a fresh breakout which could further add to the bullishness of the counter.
As the stock is in high momentum, given a fresh breakout and still has a 10.6% valuation gap, investors can have a look at this counter for investment decisions. This quick framework of analyzing stocks can be replicated for other counters as well.
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X (formerly, Twitter) - Aayush Khanna