SBI Share Price Rose After Analysts Stay Bullish Post Upbeat Q4 Results

Today, State Bank of India (SBI) share price increased by more than one percent, continuing its upward trend from the previous session following the bank's fourth-quarter results, which exceeded expectations. At 9:50 am IST, SBI's shares were up by 0.13%, trading at ₹820.70 each on the Bombay Stock Exchange (BSE).

State Bank of India, the nation's largest public sector bank, announced a record quarterly net profit of ₹20,698 crore for the fourth quarter of FY24. This represents a 24% increase from the ₹16,694.5 crore reported in the same quarter of the previous year, significantly surpassing the Bloomberg estimate of ₹13,440 crore.

The management of the public sector bank anticipates a 14-16% increase in its credit book for the current fiscal year, indicative of the prevailing optimism regarding domestic economic growth. It also forecasts a deposit growth rate of 12-13% for FY25. During the March quarter, the bank's asset quality saw improvements, with the Gross Non-Performing Assets (NPA) reducing by 2.9% and the Net NPA declining by 6.1% on a quarter-over-quarter basis. 

“SBI logged a strong all-around show in 4Q, with robust credit growth at 16% YoY, healthy margins at 3.3%, and a strong 14% PAT beat," said Anand Dama, Senior Research Analyst at Emkay Global Financial Services.

Considering the robust net interest margins (NIMs)/fees, treasury gains, reduced operational expenses, and controlled Loan Loss Provisions (LLP)—a pattern observed across Public Sector Banks (PSBs), particularly in the case of SBI—Emkay Global has increased its earnings projections for FY25-26E by 9-14%. The firm expects SBI to maintain a strong Return on Assets (RoA) and Return on Equity (RoE) at 1.1% and 17-18%, respectively. Consequently, Emkay Global has maintained a 'Buy' rating for SBI and elevated its share price target to ₹950 from the previous ₹750.

Kotak Institutional Equities has reaffirmed its 'Buy' recommendation for SBI shares, setting a target price of ₹950 each. The brokerage highlighted the bank's consistent loan growth, stable net interest margins, and robust asset quality as major strengths. It anticipates that SBI will maintain a relatively stable performance in the future.

Motilal Oswal noted that SBI had a stable quarter, marked by consistent revenue growth and strong asset quality, which allowed the bank to effectively manage its provisioning expenses. The brokerage forecasts that SBI will achieve a Return on Assets (RoA) and Return on Equity (RoE) of 1.1% and 18.5%, respectively, in FY26. Maintaining its 'Buy' recommendation, Motilal Oswal increased its target price for SBI shares to ₹925 each.

On Thursday, State Bank of India (SBI) conveyed its confidence in expanding its credit book by 14-16% in the current fiscal year, driven by the overall positive outlook on domestic growth. This statement followed the bank's impressive performance in the March quarter and throughout FY24.

“Once again, we have delivered excellent numbers," chairman Dinesh Khara told media persons after announcing the bank’s financial results on Thursday. “Our net profit for the fiscal year FY24 is the highest ever."

Khara's positive outlook stems from the widespread expansion observed in the bank's loan portfolio over the three months ending in March. Retail loans experienced a 14.7% year-over-year growth, while corporate loans increased by 16.2%. Additionally, the small business and agriculture sectors made significant contributions, growing by 20.5% and 17.9%, respectively. Consequently, the bank’s overall loan book in India saw a year-over-year increase of 16.3% as of March 31. Khara noted, “We are seeing growth (in corporate loans) also coming from the conventional industries."

Looking forward, the bank is identifying areas where it can enhance its performance further. Khara stated, "On the liability side, we are concentrating on expanding our current account holdings, while preserving our dominant position in savings deposits. We aim to reduce our cost-to-income ratio by concentrating on the income side."