SBI Q3 Preview: Profit likely to surge 64% YoY amid lower staff costs, stable asset quality

SBI’s stock has remained resilient—rising 1 percent during the October-December quarter

India’s largest lender, the State Bank of India (SBI), is on track to post an impressive 64 percent year-on-year (YoY) surge in net profit for the third quarter of the fiscal year 2025 (Q3FY25). This robust performance comes on the back of lower employee costs, stable asset quality and healthy growth in both loans and deposits, according to analysts. The bank is set to unveil its Q3 financial results on 6 February 2025.

According to Moneycontrol poll of 6 brokerages, SBI is poised to report a net profit of Rs 15,075 crore for Q3FY25—up significantly from Rs 9,164 crore in the same quarter of the previous year. Meanwhile, net interest income (NII) is expected to see a modest 6 percent rise, reaching Rs 42,050 crore, compared to Rs 39,816 crore in Q3FY24.

Estimates of analysts polled by Moneycontrol are shown to be in a diverse rangE. Among the brokerages polled, Emkay Global rolled out the most bullish projections while KR Choksey Research forecasted the slowest growth for SBI.

What factors are driving the earnings?

Loan, deposits expanding in sync: Analysts at KR Choksey predict that SBI’s loan book will expand by 14 percent YoY, reaching Rs 35 lakh crore in Q3FY25. Deposits, too, are expected to witness healthy growth of 13.3 percent YoY, climbing to Rs 47 lakh crore during the same period.

Margin contraction: Emkay Global anticipates that SBI’s net interest margins will either remain unchanged or experience a slight contraction of 7 basis points YoY, settling at 3.1 percent in Q3FY25. The rising cost of funds appears to be nearing its peak, potentially exerting mild pressure on profitability.

Stable asset quality: The bank’s asset quality is expected to remain largely stable on a quarter-on-quarter (QoQ) basis, thanks to reduced stress in the agricultural sector. However, slippages could be higher on a yearly basis due to the classification of MTNL as a non-performing asset (NPA), according to Emkay Global. The brokerage did not provide specific figures for the expected impact.

What to look out for in the quarterly show?

Investors will be keenly tracking SBI’s loan and deposit growth, asset quality trends, unsecured loan portfolio, margin movements, and return on equity (RoE).

Despite broader market turbulence, SBI’s stock has remained resilient—rising 1 percent during the October-December quarter, even as the Nifty 50 index slipped by 4 percent.

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