Buy State Bank of India; target of Rs 915: Motilal Oswal

Motilal Oswal is bullish on State Bank of India recommended buy rating on the stock with a target price of Rs 915 in its research report dated May 04, 2025.

Broker Research

May 05, 2025 / 14:46 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on State Bank of India

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%. Opex grew 18% YoY to INR357b (19% higher than MOFSLe). This was led by a spike in overhead expenses, which stood at INR176.9b (vs. INR128.6b in 3Q). SBIN’s loan book grew 12% YoY / 4% QoQ while deposits grew 9% YoY / 3% QoQ. CASA ratio increased 77bp QoQ to ~40%. Slippages during 4QFY25 stood at INR42.2b (0.42% annualized). The GNPA ratio improved 25bp QoQ to 1.82%, while NNPA improved 6bp QoQ to 0.47%. The PCR ratio stood broadly stable at 74.2%.

Outlook

We cut our earnings estimates by 4.6%/5.0% for FY26/FY27 due to higher provisions and NIM pressures. We expect FY27 RoA/RoE at 1.0%/16.1%. Reiterate BUY with a TP of INR915 (based on 1.2x FY27E ABV).

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