State Bank of India (SBI) remains a compelling investment in the public sector banking space, backed by attractive valuations, significant monetisable assets, and robust operational performance, according to Parag Thakkar, Senior Fund Manager at Fort Capital.

Speaking with CNBC-TV18, Thakkar highlighted that SBI stock currently trades at about 1.1 times its price-to-book value, a level he finds appealing given the substantial value embedded in its subsidiaries. He estimates the value of these subsidiaries at approximately ₹300 per share. While SBI Life and SBI Cards are already listed, Thakkar pointed to significant hidden value in unlisted entities—notably SBI’s stake in the National Stock Exchange (NSE), valued at around ₹50,000 crore. Upcoming listings of SBI Mutual Fund and SBI General Insurance also present near-term monetisation opportunities.

Looking forward, Thakkar projects SBI’s FY27 book value at ₹585 per share, implying the stock is trading close to 1x its forward price-to-book multiple. This valuation appears attractive as the bank’s Return on Assets (ROA) has now crossed the 1% mark.

Operationally, SBI’s recent quarterly performance reinforced the investment case. The bank reported an expansion in Net Interest Margin (NIM), supported by an 18% growth in low-cost current account deposits and a strong 25% rise in fee income. Thakkar also described the bank’s credit cost—below 50 basis points on a loan book of ₹44 lakh crore—as “amazing.”

Amid a pro-growth policy environment, SBI has raised its credit growth guidance from 11–12% to 12–14%. Thakkar views the bank as a “pure play leverage play on India’s economy,” well-positioned to benefit from expected GDP growth of 7–7.5%.

He also relayed confidence from SBI’s chairman that the bank’s guidance of achieving a 3% NIM by March 2026 remains intact, even in the event of a 25 basis point rate cut. This stability is expected to be sustained through continued growth in current account deposits and fee income.