State Bank of India Q1 Preview: Net Profit may surge 147.3% YoY to Rs 15,009 crore

State Bank of India Q1 Preview: Net Profit seen up 147.3% YoY to Rs 15,009 crores

India’s largest public sector bank by market capitalisation, State Bank of India, is expected to report a 147 percent surge in its net profit to Rs 15,009 crore for the first quarter of this fiscal. The net interest income (NII) of the bank is likely to jump 26.7 percent on-year to Rs 39,533.1 crore, shows a poll of three brokerages conducted by Moneycontrol.

State Bank of India Q1FY24 Preview

“We expect operating profit to double (lower base as there was a treasury loss). We are building a 25 percent on-year growth in NII on the back of a 15 percent annual loan growth. We are building NIM to decline 20 bps QoQ but do see a possibility of stable performance, given the structure of loan book and negligible need for deposits to fund this growth,” said a review note by Kotak Institutional Equities.

“We expect slippages at 1.5 percent of loans (PSL slippage are high in 1QFY24) to be driven mostly by agriculture. Retail and corporate will continue to hold up relatively well. The first quarter usually tends to have negligible change or marginally higher NPL ratios, given the high slippages,” it said.

Also Read: Buy ICICI Bank; target of Rs 1330: Emkay Global Financial

Brokerage Views 

Morgan Stanley has an 'overweight' rating on the stock, with a target price of Rs 715 per share. The brokerage has raised its FY24 earnings estimate, led by lower credit costs.

Brokerage firm Motilal Oswal is bullish on State Bank of India stock and has recommended buy rating on the stock with a target price of Rs 700 in its research report dated May 18, 2023.

JPMorgan has an 'overweight' rating on the stock, with a target price of Rs 720 per share. Net income was 11 percent ahead driven by lower provisions. Operating profit was in-line with expectations, the brokerage said. Domestic loan growth was at 16 percent was higher than system. Only negative was elevated capex.

LKP Securities gave a 12-month target price of Rs 743 for State Bank of India in a May 23 report.

Also Read: Buy Kotak Mahindra Bank; target of Rs 2330: KR Choksey

Stock Performance

The SBI stock has given a return of 8.07 percent over the last six months. The stock has thus outperformed the benchmark Nifty Bank index by a small margin, as the benchmark index has given a return of 7.10 percent over the same duration.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.