Net interest income rose 14 per cent and margins improved in the September quarter, supporting a broadly positive analyst outlook despite uneven forecasts and near-term risks.
State Bank of India’s latest quarterly results left analysts broadly constructive on the lender’s outlook, even as some of them flagged the usual mix of risks: treasury volatility, slower loan growth versus peers and the drag from one-off gains. Business Standard reported that the bank’s shares slipped on Tuesday after the earnings release, but recovered in early Wednesday trade, rising 1.8 per cent to ₹987.75 on the BSE.
The market’s attention was on the quality of SBI’s underlying performance rather than the headline profit figure. The bank posted a September-quarter net profit of ₹23,040 crore, up 14.3 per cent, helped by a strong increase in net interest income and a one-time gain from the divestment of SBI Mutual Fund. Antique Stock Broking said adjusted profit was closer to ₹17,000 crore, which it estimated was below expectations because of a ₹1,300 crore treasury loss and higher operating expenses booked early in the year to keep costs on a steadier path later on.
Even so, the core banking numbers were strong enough to support a positive read-through. Net interest income rose about 14 per cent from a year earlier to ₹49,140 crore, ahead of estimates from Motilal Oswal Financial Services, while net interest margin improved by 8 basis points from the previous quarter to 2.94 per cent. The bank also kept its domestic margin guidance at above 3 per cent for FY27. Loan growth came in at 18 per cent year on year and deposits rose 12 per cent, aided by $10.9 billion in FCNR(B) deposits, according to the bank’s results.
Brokerages remained divided on how far the strength in SBI’s core business can offset near-term noise. Jefferies kept the lender as its top sector pick, pointing to a capital adequacy ratio of 13 per cent, healthy returns and room to monetise stakes in businesses. It lifted its FY27 to FY29 earnings estimates by 1 per cent to 2 per cent and set a target price of ₹1,320. Antique, which maintained a buy rating, trimmed its target to ₹1,155 from ₹1,255 after cutting non-interest income assumptions. Nuvama Research took a more cautious line, reducing earnings estimates and lowering its target to ₹1,225, citing macroeconomic uncertainty and higher risk-free rates. Still, as Moneycontrol and NDTV Profit also reported, most analysts agreed that SBI’s asset quality, margin trend and balance-sheet strength remain supportive, even if the full-year path may be less smooth than the headline numbers suggest.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
