The share price of State Bank of India (SBI) witnessed 1.58 per cent decline to close at ₹753.95 on Thursday’s trading session even after the public sector bank robust results for the December quarter.
SBI, on February 6, posted 84 per cent year-on-year (YoY) jump in its net profit for the quarter ending December 31, 2024, to ₹16,891 crore, surpassing expectations. In the same period last year, the public sector lender’s net profit was ₹9,164 crore.
Net interest income (NII) increased by 4 per cent to ₹41,446 crore, compared to ₹39,816 crore in the corresponding period last year. Employee expenses for the bank decreased by 17 per cent to ₹16,074 crore.
SBI‘s domestic loans experienced a year-on-year growth of 14.06 per cent. The Net Interest Margin (NIM) for the entire bank for the first three quarters of FY25 is 3.12 per cent, while domestic NIM is 3.25 per cent. The Whole Bank NIM for Q3FY25 stands at 3.01 percent, and the Domestic NIM is 3.15 percent.
The lender’s asset quality showed positive movement, with the gross NPA ratio decreasing to 2.07 per cent at the end of December 2024, compared to 2.13 per cent at the end of the previous quarter (September 2024). The net NPA ratio remained stable at 0.53 per cent during the same period.
During the reported quarter, the lender’s deposits grew by 9.81 per cent to ₹52.3 lakh crore, up from ₹47.62 lakh crore in the same period last year.
“State Bank of India (SBI) posted a robust Q3FY25 net profit of ₹16,891 crore, marking an 84.32% YoY surge from ₹9,164 crore. Operating profit rose 15.81% YoY to ₹23,551 crore. The bank’s ROA improved by 42 basis points to 1.04%, with ROE and ROA for 9MFY25 at 21.46% and 1.09%, respectively. Net Interest Income (NII) increased 4.09% YoY to ₹41,446 crore. SBI’s credit grew 13.49% YoY, with domestic advances rising 14.06%. Deposits increased 9.81% YoY, while CASA deposits grew 4.46%, bringing the CASA ratio to 39.20%. Whole banks and domestic NIM stood at 3.01% and 3.15%, respectively,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.
Buy or sell?
According to Sumeet Bagadia, Executive Director at Choice Broking, SBI share price has made a strong base at ₹720, and the banking major may rebound from the lower levels.
“If this crucial remains sacrosanct, SBI shares may soon touch the ₹780 and ₹800 apiece mark. So, SBI shareholders are advised to maintain a stop loss at ₹720 and hold the scrip for the abovementioned targets. Likewise, fresh investors can also initially buy momentum at the current market price and continue buying on dips for the short-term target of ₹800. However, they are also advised to maintain a strict stop loss of ₹720,” Bagadia said.
