Q1FY24 Preview: State Bank of India: NII seen at Rs. 401,239 million, PAT at Rs. 154,545 million

4 Aug 2023 , 07:11 AM

Result date: 4^th August, 2023

Recommendation: Buy

Target price: Rs. 700  

(Source: IIFL Research)

State Bank of India (SBI) could post 28.6% growth in its Net Interest Income (NII) over the year-ago quarter, owing to strong double digit growth in its loan book. The Bank’s retail as well as corporate loans continue to witness healthy momentum. 

SBI’s pre-provisioning operating profit (PPOP) could jump 98% over the year-ago quarter, partly due to a low base of the year-ago quarter wherein the Bank booked a treasury loss. In the June 2023 quarter, SBI could book treasury profits. The Bank’s Net Interest Margin is expected to remain stable during the quarter.

Stress in SBI’s agricultural loans (seasonal occurrence) could lead to rise in slippages on a sequential basis. Overall credit costs as well as asset quality though are likely to remain under control.

SBI’s Profit After Tax (PAT) could surge 154.68% over the year-ago quarter.

Important management insights to watch out for:

• Details on operating expenses
• Update on increase in deposit costs
• Outlook on loan growth, asset quality

Rs. Million	June 2023 estimates	YoY change	QoQ change
NII	401,239	28.60%	(0.64)%
PPOP	252,621	98.10%	2.63%
Profit After Tax	154,545	154.68%	(7.44)%

Source: Brokerage Reports