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Published: May 10, 2024
Updated: May 10, 2024

SBI's Stellar Performance Sparks Analyst Optimism: Is it Time to Invest?

Record-Breaking Profit: SBI Shines in Q4

State Bank of India (SBI), India's largest state-run lender, has reported its highest-ever quarterly net profit of ₹20,698 crore for the fourth quarter of FY24. This remarkable achievement reflects a substantial 24% growth from the previous year's ₹16,694.5 crore.

Bullish Projections: Growth Outlook for FY25

SBI expects to sustain its growth momentum, forecasting a credit book expansion of 14-16% in the current fiscal year. Additionally, it anticipates deposit growth to range between 12-13% for FY25, signalling optimism amidst the prevailing economic landscape.

Improving Asset Quality: A Positive Turn

During the March quarter, SBI witnessed an improvement in asset quality, with Gross NPA decreasing by 2.9% and Net NPA declining by 6.1% quarter-on-quarter. This positive trend underscores the bank's efforts towards enhancing its overall financial health.

Analyst Insights: Optimism and Recommendations

Financial analysts are bullish on SBI's performance, citing robust credit growth, healthy margins, and solid asset quality metrics. Emkay Global Financial Services raised its earnings estimates for FY25-26E by 9-14%, projecting sustained strong Return on Assets (RoA) and Return on Equity (RoE) at 1.1% and 17-18%, respectively. Similarly, Kotak Institutional Equities and Motilal Oswal maintain 'Buy' ratings on SBI shares, with target prices of ₹950 and ₹925 per share, respectively.

Market Response: SBI Shares on the Rise

At 9:50 am, SBI shares were trading 0.13% higher at ₹820.70 apiece on the BSE, reflecting investor confidence and optimism surrounding the bank's performance and growth prospects.

SBI's exceptional performance in Q4 FY24, coupled with bullish projections and positive analyst recommendations, positions the bank as a compelling investment opportunity in the current market landscape.