State Bank of India

“SBI has completed its NPA turnaround, earns a respectable 15% ROE, and is structurally positioned to compound at 13-14% CAGR anchored to India's long credit expansion cycle — but it is not an exceptional business. Permanent state ownership creates structural misalignment with minority shareholders, marginal returns on incremental equity are compressing as the easy NPA recovery tailwind fades, and there is a material 25-30% probability of another directed-lending-driven earnings destruction cycle over any 10-year horizon. At 1.53x P/B, the market has correctly priced these characteristics. The stock offers fair, not outstanding, value — warranting monitoring for a better entry below 1.2x P/B (~₹770) rather than immediate capital commitment.”