ICICI Securities's research report on State Bank of India
Amidst tough macro environment, SBI reported yet another steady quarter with ~12% YoY growth in loans, deposits and PAT. NIM decline was arrested at 10bps QoQ (even lower adjusted for IT refund); SBI expects a healthy pull back in H2FY26. CA growth surged further YoY. Despite subdued growth in Xpress credit, overall RAM growth sustained at ~14% YoY led by SME/home loans at 19%/15% YoY. Fee growth was strong at 10% YoY which, along with treasury gains, led to a healthy RoA print of 1.14%. Net NPA was stable at 47bps. Seasonality drove slippages higher QoQ, but improved YoY. We bake in the recent INR 250bn capital raise. We revise our FY26E/27E EPS upwards by 5-6% each and expect strong RoA of 1% for both years.
Outlook
Retain BUY; TP revised to INR 970. We argue that treasury gains for SBI appear recurring and less risky. Despite sluggish growth in Xpress credit, SBI has delivered superior growth in overall retail loans suggesting improved execution.
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