Look at the financial highlights of SBI at the sbi website over the last 5 years. If you can make out something clearly from this, it says SBI is headed for a clean grown.
The stock is trading at Rs 685 on 25th Feb 2005 when I am writing this article. This discounts the 2004 EPS of Rs 69 by around 10 times and the last 12 months EPS of Rs 78 by over 8 times. At a very conservative growth of 20% over next 3 years should see an EPS of around Rs 135 in next 3 years. This discounts the current price by just 5 times.
We clearly see an increase in apitite for PSU banks over next years as a result of favourable policy changes. We can expect a PE multiple of around 15 for this stock in the year 2008. This results in a projected stock price of Rs 2000+. If you find this return attractive go and grab the stock at current levels and forget about minor trends.
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