Macquarie upgrades State Bank of India to outperform from neutral

Macquarie today upgraded State Bank of India (SBI) to 'outperform' from 'neutral', and increased the target price to Rs 2,800 from Rs 2,150.

The global brokerage sees the recent capital infusion into the bank as a positive for its Basel-III needs. Asset quality issues are close to bottoming out, Macquarie said, noting that SBI is the "best stock to play" the non-performing loans recovery cycle.

The government has reportedly approved a fund infusion of Rs. 3,000 crore into SBI in the current fiscal year (ending March 2013) to boost the bank's capital base.

The infusion into the country's biggest bank will be done through a preferential allotment of shares, chairman Pratip Chaudhury had earlier said.

Last fiscal, the government had infused Rs. 7,900 crore in SBI to increase the Tier-I capital of the country's largest bank.