State Bank of India share price target

We maintain our BUY recommendation on the stock.

PAT beat our estimates by 5% mainly aided by govt-guaranteed SRs; return ratios stay steady with RoA/RoE of 1.1/17.3% in FY25

SBI saw a decent quarter; while core PPoP beat PLe by 11.3% due to better fees and TWO recoveries, asset quality was soft as provisions were higher at 66bps (PLe 25bps) since (1) write-offs/ageing provisions were more and (2) strong TWO recovery and SR reversal (Rs39bn) provided leeway to front load credit costs. Credit growth is guided to be above system in FY26E; we are factoring a 12% CAGR over FY25-27E. Opex for FY25 was flat at Rs1.18trn due to 9.7% decline in staff cost. For FY26, bank has guided a cost to income of 50-51% with...

State Bank of India (SBIN) reported a 4QFY25 PAT of INR186.4b (in line) with robust treasury gains offsetting higher opex and provisions. NII grew 3% YoY to INR427.7b (in line). NIM stood at 3.0% (1bp QoQ dip) with domestic NIM holding stable at 3.15%.

SBI posted a slightly soft quarter, as credit growth moderated to 12.4% YoY due to pre-payments in the corporate book, while higher opex (staff cost + deposit insurance) and provisions (std assets + investment + PLI incentive) caused a 5% earnings miss, with PAT at Rs186bn/1.1% RoA.

Q4 numbers were a mixed bag. NII at Rs. 42,775 crore (in line) grew by 3% y-o-y/ 3% q-o-q. NIMs were stable, declined marginally by 1 bps q-o-q to 3.0% although outlook on NIMs remains negative. Core fee income growth was healthy at 13% y-o-y/ 36% q-o-q.

Black & White

SBI is expected to sustain healthy performance in terms of growth and profitability in the near to medium term. Loan growth guidance is intact at ~14-15% y-o-y and deposit growth at 10% y-o-y.

Slow & steady wins the race

We maintain our BUY recommendation on the stock.

State Bank of India (SBI) reported Q3FY25 PAT of INR 168.9bn (up 84% YoY) led by sharp opex reduction (off high base) and contained credit costs, while revenue growth was muted (up 2% YoY).

PAT declined sequentially with lower NII and other income, RoA of 1.09% in 9MFY25

State Bank of India saw a soft Q3 on subdued NII and miss in other income. The bank’s dominant market position, best-in-class management and strong digital abilities would aid in maintaining its market share, while delivering healthy profitability.

Q3 numbers were a mixed bag. NII at Rs. 41,446 crore (below estimate) grew by 4% y-o-y/ flat q-o-q. NIMs declined by 13 bps q-o-q to 3.01% led by higher cost of funds.

SBI is expected to sustain its steady performance in terms of growth and profitability in the near to medium term. Asset quality is holding up well and the portfolio is still not showing worrying signs, including unsecured retail loans despite the slowdown in growth.

We maintain our BUY recommendation on the stock.