Buy State Bank of India; target of Rs 900: ICICI Securities

BUY

ICICI Securities's research report on State Bank of India

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). Reported RoA remained strong at 1.04%. It has sustained strong loan growth (up 4% QoQ; 14% YoY), though NII growth lagged significantly (flattish QoQ; up 4% YoY). Domestic/global NIM declined 12/13bps QoQ and was key the disappointment. Gross slippages defied usual seasonality and remained one of the lowest across peers at 0.4% annualised. Unsecured gross NPA inched up, but at 1.1% does not look worrisome, in our view. Tweak EPS and see SBI delivering ~90bps RoA and >15% RoE for FY26E without much asset quality risks.

Outlook

Stock trades inexpensive at ~1.05x FY26E core banking business for given growth profile. Maintain BUY with an SoTP-based revised TP of INR 900 (vs INR 1,000 earlier), valuing the core banking business at ~1.35x FY26E (vs 1.5x earlier). Key risk is steep macro slowdown.

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State Bank of India_09022025_ICICI Securities