SBI shares fell more than 3% in early trading today, hitting a day’s low of Rs 819.4, despite the banking major reporting results in line with expectations. For the April-June quarter, SBI announced a net profit of Rs 17,035.2 crore, marking a 0.9% increase from the same period last year. This performance surpassed analysts’ expectations of a contraction.
Bernstein has maintained a “Market Outperform” rating on State Bank of India (SBI) with a target price of Rs 810. The firm notes that while the normalization pain is evident, the return on assets (RoA) remains above 1%.
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Bernstein highlights that deposit growth for SBI is sharply below the system average, and the muted operational expense growth reflects a normalization of net operating income (NOI). Additionally, Bernstein points out that credit costs are expected to rise further.
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CLSA on SBI
CLSA has reiterated its “Outperform” rating on State Bank of India (SBI) with a target price of Rs 1,075 per share. The report notes that while Q1 short loan growth remains healthy, deposit growth is lagging. Net Interest Margin (NIM) is largely stable, and asset quality remains intact.
Credit costs have increased to 37 basis points from 15 basis points in FY24 but are still below run-rate levels. Management expects loan growth of 15% and margins to remain largely at current levels for FY25. CLSA forecasts a return on equity (ROE) of 15-16% over the medium term.
JP Morgan on SBI
JP Morgan has retained a “Sell” rating on State Bank of India (SBI) with a target price of Rs 725 per share. The report highlights that while lower operating expenses and higher other income helped offset a miss in net interest income (NII) for Q1, credit costs have increased.
Deposits declined by 0.3% quarter-on-quarter, aligning with the sector’s muted deposit growth. Credit costs, annualized at 50 basis points for Q1, were higher than FY24 levels. JP Morgan expects SBI’s current return on equity (ROE) of less than 1% to be sustained as credit costs are projected to trend upward.
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Sports betting siteThe report also notes that relatively lower core pre-provision operating profit (PPoP) to asset levels raises concerns about current profitability, and the low counter-cyclical buffer offers minimal cushion. Despite this, management remains confident about asset quality in the unsecured credit segment.Come from Sports betting site VPbet
UBS on SBI
UBS has a “Sell” rating on State Bank of India (SBI) with a target price of Rs 725, citing concerns that the bank’s return on assets (RoA) may fall below 1% due to rising credit costs and a lower core pre-provisioning operating profit, which leaves minimal cushion on current profitability. UBS also notes that the current profitability has limited support from lower counter-cyclical buffers.
Investec on SBI
In contrast, Investec maintains a “Buy” rating on SBI with a target price of Rs 880 per share. The brokerage acknowledges a margin miss and lower core pre-provisioning operating profit but expects strong credit growth of 15% year-on-year for FY25, with SBI having an adequate liquidity buffer.
Stock Performance in Last One Year
In terms of stock performance, State Bank Of India has experienced mixed results. Over the past month, the stock posted a negative return of 3.62%. In contrast, over the past six months, the stock delivered positive returns of 28.88.41%, indicating a period of uptrend.
Year-to-date figures also remain positive, showing a gain of 30%. Moreover, over the last twelve months, the stock achieved a return of 45.91%, highlighting its resilience over the longer term.
(Disclaimer: Views, recommendations, and opinions expressed are personal and do not reflect the official position or policy of Financial Express.com. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)
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