State Bank of India (SBI) will report its Q2 FY25 results on November 8, 2024, drawing attention from analysts and investors interested in updates on the bank’s asset quality, loan growth, deposits, net profit, and interest income.
Analyst Expectations for SBI’s Q2 FY25 Results:
- KRChoksey Research:
- Net Interest Income (NII): Expected to grow by 5.7% year-over-year (YoY) and 1.5% quarter-over-quarter (QoQ), fueled by an anticipated 16.6% YoY rise in advances, with corporate lending as the primary driver.
- Credit vs. Deposit Growth: Credit growth is expected to exceed deposit growth, with credit growing by 16.6% YoY compared to deposit growth at 7.9% YoY.
- Pre-Provision Operating Profit (PPOP): Projected to rise by 26.8% YoY but drop by 6.9% QoQ, largely due to lower employee costs in comparison to the previous year’s high base.
- Net Profit: Estimated to increase by 5.2% YoY, based on normalized credit costs compared to the previous low base.
- Dolat Capital:
- Loan Growth: Anticipated at 15% YoY and 3% QoQ, with net interest margin (NIM) expected to stay stable QoQ at 3.2%.
- Asset Quality: Slippages are likely to remain below 1%, while credit costs are projected at around 30 basis points.
- Return on Assets (RoA): Estimated at approximately 1%, with delinquency trends in the retail unsecured segment to be closely watched.
- Yes Securities:
- Loan Growth: Expected sequential growth of around 3%, consistent with the bank’s unique growth profile.
- NII and NIM: While NII growth may be somewhat lower than loan growth due to rising deposit costs, NIM is expected to see a slight sequential decrease.
- Provisions: Projected to decrease slightly from the previous quarter, with seasonal factors helping to lower slippages.
- Prabhudas Lilladher:
- NII: Projected to rise by 3.0% QoQ, with loan growth at around 3.5%.
- Margins and PPOP: Margins may fall by 4 basis points sequentially, while PPOP is likely to decline by 7.2% QoQ due to increased operating expenses and stable other income.
- Asset Quality: Expected to improve, with a 10 basis-point decrease in gross non-performing assets (GNPA) and a minor rise in credit cost by 1 basis point.
- Sharekhan:
- Loan Advances: Expected to grow around 14% YoY.
- NIM and Asset Quality: NIM is likely to dip slightly on a QoQ basis, but asset quality should remain broadly stable.
SBI Share Price Target (ICICI Securities)
ICICI Securities maintains a Buy rating for SBI with a target price of INR 1,000 per share, based on:
- The stock’s valuation at ~1.15x FY26E for core banking after adjustments.
- Consistent return on equity (RoE) and return on risk-weighted assets (RoRWA), despite a peak in RoA.
- Anticipated market share gains in credit, strong liquidity positioning (LDR, LCR), and a favorable risk profile in the retail segment, especially among government employees, which has proven resilient in uncertain periods.
This outlook underscores SBI’s stable asset quality, controlled slippages, and robust growth in lending—solidifying its place among India’s top-performing public sector banks.
State Bank of India (SBI) will report its Q2 FY25 results on November 8, 2024, drawing attention from analysts and investors interested in updates on the bank’s asset quality, loan growth, deposits, net profit, and interest income.
Analyst Expectations for SBI’s Q2 FY25 Results:
- KRChoksey Research:
- Net Interest Income (NII): Expected to grow by 5.7% year-over-year (YoY) and 1.5% quarter-over-quarter (QoQ), fueled by an anticipated 16.6% YoY rise in advances, with corporate lending as the primary driver.
- Credit vs. Deposit Growth: Credit growth is expected to exceed deposit growth, with credit growing by 16.6% YoY compared to deposit growth at 7.9% YoY.
- Pre-Provision Operating Profit (PPOP): Projected to rise by 26.8% YoY but drop by 6.9% QoQ, largely due to lower employee costs in comparison to the previous year’s high base.
- Net Profit: Estimated to increase by 5.2% YoY, based on normalized credit costs compared to the previous low base.
- Dolat Capital:
- Loan Growth: Anticipated at 15% YoY and 3% QoQ, with net interest margin (NIM) expected to stay stable QoQ at 3.2%.
- Asset Quality: Slippages are likely to remain below 1%, while credit costs are projected at around 30 basis points.
- Return on Assets (RoA): Estimated at approximately 1%, with delinquency trends in the retail unsecured segment to be closely watched.
- Yes Securities:
- Loan Growth: Expected sequential growth of around 3%, consistent with the bank’s unique growth profile.
- NII and NIM: While NII growth may be somewhat lower than loan growth due to rising deposit costs, NIM is expected to see a slight sequential decrease.
- Provisions: Projected to decrease slightly from the previous quarter, with seasonal factors helping to lower slippages.
- Prabhudas Lilladher:
- NII: Projected to rise by 3.0% QoQ, with loan growth at around 3.5%.
- Margins and PPOP: Margins may fall by 4 basis points sequentially, while PPOP is likely to decline by 7.2% QoQ due to increased operating expenses and stable other income.
- Asset Quality: Expected to improve, with a 10 basis-point decrease in gross non-performing assets (GNPA) and a minor rise in credit cost by 1 basis point.
- Sharekhan:
- Loan Advances: Expected to grow around 14% YoY.
- NIM and Asset Quality: NIM is likely to dip slightly on a QoQ basis, but asset quality should remain broadly stable.
SBI Share Price Target (ICICI Securities)
ICICI Securities maintains a Buy rating for SBI with a target price of INR 1,000 per share, based on:
- The stock’s valuation is at ~1.15x FY26E for core banking after adjustments.
- Consistent return on equity (RoE) and return on risk-weighted assets (RoRWA), despite a peak in RoA.
- Anticipated market share gains in credit, strong liquidity positioning (LDR, LCR), and a favorable risk profile in the retail segment, especially among government employees, which has proven resilient in uncertain periods.
This outlook underscores SBI’s stable asset quality, controlled slippages, and robust growth in lending—solidifying its place among India’s top-performing public sector banks.
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