16 May 2023 , 12:27 PM
Result date: 18th May, 2023
Recommendation: Buy
Target price: Rs. 700
(Source: IIFL Research)
Country’s apex bank, State Bank of India (SBI) could post ~28% growth in its Net Interest Income (NII) over the year-ago quarter. Healthy momentum in advances (up 16% year-on-year) will be a key driver of NII. While retail loans remain on a strong footing, pick up in credit demand from SMEs and Corporates could further support loan growth.
SBI’s net interest margin could inch up by a few basis points amid rising deposit costs and relatively faster repricing of loans. Pre-provisioning operating profit could increase 29% over the year-ago quarter on the back of flattish opex ratios.
The bank has witnessed continued improvement in asset quality and the trend is likely to continue in the March 2023 quarter as well. Credit costs too are expected to remain stable. Improved underwriting and significant mobilization in customer engagement by the recovery team has aided SBI’s asset quality performance. Fresh slippages have also moderated, beating private peers.
SBI’s Profit After Tax (PAT) could surge 62.1% over the year-ago quarter.
Important management insights to watch out for:
Rs. Crore |
March 2023 estimates |
YoY change |
QoQ change |
Net Interest Income |
39,856 |
27.7% |
4.7% |
Pre Provisioning Operating Profit |
25,452 |
29.1% |
0.9% |
Profit After Tax |
14,774 |
62.1% |
4.0% |
Source: Brokerage Reports
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