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SBI share price today: State Bank of India (SBI) share price today fell 5.2 per cent to Rs 804 per share on the BSE on Monday. This comes amid a broader sell-off in Indian stock markets and after the lender posted in-line April-June (Q1) quarter results.
SBI Q1 FY25 results
State Bank of India (SBI), on Saturday, August 3, reported a 0.9 per cent dip in standalone net profit at Rs 17,035 crore for Q1 FY25 as against a net profit of Rs 16,884 crore in the April-June quarter of 2023-24 (Q1 FY24).
Net interest Margins (NIM) from domestic operation moderated 12 basis points Y-o-Y to 3.35 per cent. NIM was 3.47 per cent in Q4 FY24. The bank’s management has guided for NIM to be between 3.2-3.4 per cent in FY25.
Operationally, SBI’s Q1 FY25 gross advances increased by 15.39 per cent Y-o-Y to Rs 38.12 trillion, including retail loans of Rs 13.68 trillion (up 13.60 per cent Y-o-Y) and Home loans of Rs 7.39 trillion (up 13.64 per cent Y-o-Y).
Deposits grew by 8.18 per cent to Rs 49.01 trillion, out of which current and savings account (Casa) Deposit grew by 2.59 per cent.
What should investors do with SBI stock?
Nomura | Buy | Target price: Rs 1,030
Management notes that SBI is well positioned for a potential transition to ECL provisioning norms with potential impact of provisioning on the back book likely to be lower than previously called out (0.8-1 per cent of loans). Our FY25-26F EPS is largely unchanged.
Nuvama Institutional Equities | Buy | Target: Rs 1,026
While NIM declined 8bp Q-o-Q, largely due to the absence of interest on tax refund, core NIM improved 6bp Q-o-Q. However, the addition to CET1 from new investment norms at 11bp was lower than the guided 50bp due to change in investment mix (higher share of held-till-maturity (HTM) than earlier) and mark down of Rs 1300 crore on some available-for-sale (AFS) securities.
Given the lower impact of new investment norms compared with guidance and peers, the near-term stock reaction shall likely be subdued.
Motilal Oswal Financial Services | Buy | Target: Rs 1,015
SBI reported an in-line quarter, with pre-provision operating profit (PPoP) growth driven by controlled opex amid modest revenue growth. Margins moderated 8bp Q-o-Q; however, the bank expects margins to remain broadly stable going forward with variation of +/-10bp, aided by levers such as the credit-deposit ratio (at 69 per cent) and MCLR repricing. We broadly maintain our earnings estimates and expect FY26 RoA/RoE of 1.1 per cent/18.2 per cent.
ICICI Securities | Buy | Target: Rs 1,000
While we would like to keep close watch on NPA trajectory amidst rising systemic concerns on unsecured loans, we note SBI has seen a 10-29bps Q-o-Q rise in GNPA in Q1 in the last three years. We also note strong underlying customer profile and track record in unsecured retail book.
We keep our loan growth estimates unchanged at 15 per cent for FY24–26E. Despite building-in ~20bps NIM compression over FY24-26E, we see strong 18 per cent CAGR in PPoP due to bloated opex in FY24. We estimate SBI to deliver 100/90bps RoA and 17/16 per cent RoE for FY25/26.
On a relative basis, we see SBI dealing with lesser challenges on growth due to comfortable LDR and liquidity. We are also not worried about the impending change of guard at SBI.
Kotak Institutional Equities | Buy | Target: Rs 975
There is no further scope for improvement in return ratios from here barring operating leverage. Overall, we are well past the best in terms of return ratios and we are heading to a period of stable performance till we have a better understanding of the cycle ahead.
The risk-reward has diminished even if the business is in a relatively stronger position. sector. A sharp outperformance hereon looks unlikely.
First Published: Aug 05 2024 | 12:21 PM IST
