The shares of India’s largest public sector bank reported a flat standalone net profit for the first quarter of the current financial year. Despite this, a brokerage has given a buy recommendation, anticipating a 32% upside.
On Monday, At 11:20 a.m., State Bank of India shares were trading at ₹811.25 per share, down 4.32 percent on the National Stock Exchange. The company has a market capitalization of ₹7,22,715 crore.
State Bank of India (SBI), the largest bank in India, offers a comprehensive range of retail and corporate banking services, including insurance, mutual funds, and other financial products, available through its extensive branch network and digital platforms.
Brokerage firm CLSA has maintained its outperform rating on SBI shares, raising the target price to ₹1,075 from ₹1,000, indicating a 32% upside from the current price of ₹811.25.
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CLSA noted that SBI’s loan growth remained healthy during the June quarter, but deposit growth lagged. Nonetheless, net interest margins (NIMs) and asset quality stayed intact. JPMorgan remains “overweight” on SBI with a retained price target of ₹1,000.
State Bank of India reported a year-on-year rise of around 1 percent in its net profit to ₹17,035.16 crore in Q1FY25. The net interest income (NII) for the quarter increased by 5.7 percent year-on-year to ₹41,125 crore.
The bank’s retail loans grew by 13.60% year-on-year in the June quarter, agriculture loans increased by 17.06%, SME loans by 19.87%, and corporate loans by 15.92%.
Quarter-on-quarter, the net interest margin slightly decreased to 3.35% in the June quarter from 3.43% in the March quarter, while the cost of deposits rose by 5%.
The bank’s asset quality improved slightly to ₹21,555 crore from ₹21,051 crore in the March quarter. Gross NPA for the quarter stood at 2.21%, down from 2.24% in March, while Net NPA remained unchanged at 0.57%. SBI’s return on assets (ROA) was 1.10% for Q1FY25, and its return on equity (ROE) was 20.98% for Q1FY25.
The shares of the State Bank of India have increased by 25% in the past six months and by 43% over the past 12 months.
However, In the fiscal year 2024, the bank saw significant improvements across various financial metrics. The net profit surged to ₹61,077 crores, marking a robust growth of 21.59% year-on-year (YoY).
Written by Omkar Chitnis
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