Brokerage firm Morgan Stanley has an equal-weight rating on the shares of the State Bank of India (SBI) with a target price of Rs 670 per share. According to the brokerage, the bank continues to see strong transactions in retail and SME (small and medium enterprises) segments.

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Banking stocks have been on the radar of many top brokerages for some time, with large caps including HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Bank of Baroda, and IndusInd Bank among top favourites.

With Nifty 50 inching steadily towards the 20,000 mark, investors are pinning hopes on Nifty Bank to lead the next round of the rally. Banking heavyweights like HDFC Bank, Kotak, and SBI have all gained 1-3 percent so far in September.

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On SBI, Morgan Stanley further noted that the domestic loan growth had slowed a bit. However, in the interim, the lender has increased focus on overseas loan books.

The management has reiterated guidance of 12-14 percent loan growth for the financial year 2024, and guided for further moderation in the margin as funding costs catch up.

The shares of the lender are trading 0.75 percent higher at Rs 583.4 apiece, up for the second day in a row. The stock has climbed 2.4 percent in the past five days, however, has fallen 4.7 percent in 2023.

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