Shares of State Bank of India rose more than 6 percent to a 12-week high on Wednesday after the country's largest lender projected a recovery over the next two years following a record quarterly loss.

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Top brokerages welcomed SBI's move to clean up its accounts, recognising large part of its stressed assets that forced the Mumbai-based lender to report a quarterly loss of 77.18 billion rupees ($1.13 billion), the second highest in the country's banking industry.

The market may take solace that the gross stress has likely peaked, Jefferies said in a note, adding that core profitability should see a cyclical improvement through the second half of 2019.

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SBI added 336.7 billion rupees of non-performing loans in the March quarter, taking its total to 2.23 trillion rupees, or 10.91 percent of total loans.

Deutsche Bank said it sees better future for SBI and expects core business trends to improve consistently from here on.

SBI is still among the preferred public sector picks because of stronger CASA franchise, better asset quality and capitalisation, CLSA said in a note.

The lender, which accounts for more than a fifth of India's banking assets, said on Tuesday it aims to grow loans at an annual average of 12 percent through March 2020, nearly halve its gross non-performing loan ratio, bring down provisioning costs and improve margins.

Credit Suisse and Citi cut their target prices to 322 rupees and 325 rupees respectively, while Deutsche Bank raised it to 330 rupees from 320 rupees. Jefferies cut its target price to 355 rupees from 365 rupees, while CASA reduced it to 340 rupees from 360 rupees.

Thirty-seven brokerages of the 45 covering the state-run bank rate it "buy" or higher, six "hold" and two "strong sell". Their median price target is 350 rupees, according to Thomson Reuters data.

SBI's shares rose as much as 6.2 percent to 269.7 rupees, their highest since March 1, and were headed for a third straight session of gains. The surge was also SBI's biggest intraday percent gain since early November. The Nifty PSU bank index climbed as much as 5 percent.