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What is the story about?
Shares of State Bank of India (SBI) Ltd. declined on Monday, August 10, as brokerages are largely positive post the lender's first quarter earnings. The stock had opened higher before giving up gains.
Majority of the 50 analysts that have coverage on SBI continue to maintain a "buy" recommendation on the stock, which has no "sell" ratings from these analysts.
The brokerage has an "outperform" rating on SBI and has raised its target price to ₹1,325 apiece from ₹1,275 apiece.
It said the lender delivered a well-rounded quarter, with its domestic net interest margin (NIM) expanding by 7 basis points sequentially and was in-line with the management's earlier full-year guidance. As a result, the net interest income (NII) beat estimates by 2%.
Similar to its peers, SBI's asset quality improved with its gross / net slippage ratio declining by 20 basis points from last year, which is its lowest first quarter level in several years.
CLSA has therefore raised its financial year 2027-2029 profit after tax (PAT) estimates by 2%-6% on higher NII and lower provisions.
The brokerage has a "market perform" rating and a target price of ₹1,300 per share.
It said the lender reported a broadly steady quarter, supported by broad-based loan growth, healthy NII growth driven by a sequential improvement in NIMs and stable asset quality.
Its deposit growth remained relatively subdued, resulting in a higher liquidity deposit ratio (LDR).
Despite a seasonal rise in slippages, higher recoveries and upgrades, credit costs were stable and supported a modest improvement in asset quality, Bernstein said.
SBI's strong fee income growth of 21% and modest operating expense growth of 5% helped return on assets (RoA) improve modestly to 1.11% during the quarter.
The brokerage has a "buy" rating and a target price of ₹1,300 per share.
SBI's advances re-accelerated to 19% from last year, driven by retail, SME, agriculture, with corporate coming in flat sequentially.
The management is targeting $10 billion FCNR(B) deposits with negligible NIM impact, reiterating 3% domestic NIM and 14-15% credit growth guidance for FY27, it added.
The brokerage has a "buy" rating and target price of ₹1,310 per share on SBI.
It has lifted its earnings per share (EPS) estimates by 9%-14% for FY27-29 on stronger-than-estimated NIM momentum and better-than-estimated cost control. Its target price is raised on stronger-than-estimated core performance and healthy growth outlook.
The brokerage has an "overweight" rating and a target price of ₹1,290 per share.
It said SBI's loan growth was at 19% and was up 1% from the brokerage's estimates with SBI raising growth guidance to 14-15% from last year compared to the previous 12-14%. This underscore's SBI's confidence in the strong growth momentum.
The lender's credit costs were at 41 basis points also lower than JPMorgan's estimates of 42 basis points.
The brokerage has an "outperform" rating and a target price of ₹1,150 per share.
It said the lender's non-interest income declined 8% from last year on weak trading and forex income, though its commissions rose at a healthy pace. Its non-loan provisions jumped 5 times from last year to ₹1,300 crore the management amortised performance incentive hit across quarters as against the exit quarter earlier.
The brokerage has a "buy" rating and a target price of ₹1,320 per share.
It said the lender's asset quality is robust and credit costs are low. The bank is investing in collections platform to help expand into self-employed lending segments and can aid growth in FY28-29, the brokerage said. It has raised its core earnings estimates by 2-4%.
The brokerage has a "neutral" rating and a target price of ₹1,160 per share.
It said the lender's NIMs were a positive surprise. It said the PPOP was strong but lag in deposits is what keeps it neutral.
The brokerage has a "buy" rating and a target price of ₹1,250 per share.
It said the execution by the bank is better or at par with frontline banks at this stage of the cycle, which would allow it to trade at elevated multiples.
Of the 50 analysts who have coverage on SBI, 44 have a "buy" rating and six have a "hold rating.
SBI shares were trading 1.4% lower at 1,082 apiece at 9 am on Monday. The stock has gained 10% this year, so far.
Also Read: BSE launches index to track listed REITs: Key details explained
Majority of the 50 analysts that have coverage on SBI continue to maintain a "buy" recommendation on the stock, which has no "sell" ratings from these analysts.
CLSA
The brokerage has an "outperform" rating on SBI and has raised its target price to ₹1,325 apiece from ₹1,275 apiece.
It said the lender delivered a well-rounded quarter, with its domestic net interest margin (NIM) expanding by 7 basis points sequentially and was in-line with the management's earlier full-year guidance. As a result, the net interest income (NII) beat estimates by 2%.
Similar to its peers, SBI's asset quality improved with its gross / net slippage ratio declining by 20 basis points from last year, which is its lowest first quarter level in several years.
CLSA has therefore raised its financial year 2027-2029 profit after tax (PAT) estimates by 2%-6% on higher NII and lower provisions.
Bernstein
The brokerage has a "market perform" rating and a target price of ₹1,300 per share.
It said the lender reported a broadly steady quarter, supported by broad-based loan growth, healthy NII growth driven by a sequential improvement in NIMs and stable asset quality.
Its deposit growth remained relatively subdued, resulting in a higher liquidity deposit ratio (LDR).
Despite a seasonal rise in slippages, higher recoveries and upgrades, credit costs were stable and supported a modest improvement in asset quality, Bernstein said.
SBI's strong fee income growth of 21% and modest operating expense growth of 5% helped return on assets (RoA) improve modestly to 1.11% during the quarter.
Citi
The brokerage has a "buy" rating and a target price of ₹1,300 per share.
SBI's advances re-accelerated to 19% from last year, driven by retail, SME, agriculture, with corporate coming in flat sequentially.
The management is targeting $10 billion FCNR(B) deposits with negligible NIM impact, reiterating 3% domestic NIM and 14-15% credit growth guidance for FY27, it added.
HSBC
The brokerage has a "buy" rating and target price of ₹1,310 per share on SBI.
It has lifted its earnings per share (EPS) estimates by 9%-14% for FY27-29 on stronger-than-estimated NIM momentum and better-than-estimated cost control. Its target price is raised on stronger-than-estimated core performance and healthy growth outlook.
JPMorgan
The brokerage has an "overweight" rating and a target price of ₹1,290 per share.
It said SBI's loan growth was at 19% and was up 1% from the brokerage's estimates with SBI raising growth guidance to 14-15% from last year compared to the previous 12-14%. This underscore's SBI's confidence in the strong growth momentum.
The lender's credit costs were at 41 basis points also lower than JPMorgan's estimates of 42 basis points.
Macquarie
The brokerage has an "outperform" rating and a target price of ₹1,150 per share.
It said the lender's non-interest income declined 8% from last year on weak trading and forex income, though its commissions rose at a healthy pace. Its non-loan provisions jumped 5 times from last year to ₹1,300 crore the management amortised performance incentive hit across quarters as against the exit quarter earlier.
Jefferies
The brokerage has a "buy" rating and a target price of ₹1,320 per share.
It said the lender's asset quality is robust and credit costs are low. The bank is investing in collections platform to help expand into self-employed lending segments and can aid growth in FY28-29, the brokerage said. It has raised its core earnings estimates by 2-4%.
Nomura
The brokerage has a "neutral" rating and a target price of ₹1,160 per share.
It said the lender's NIMs were a positive surprise. It said the PPOP was strong but lag in deposits is what keeps it neutral.
Kotak Institutional Equities
The brokerage has a "buy" rating and a target price of ₹1,250 per share.
It said the execution by the bank is better or at par with frontline banks at this stage of the cycle, which would allow it to trade at elevated multiples.
Stock reaction
Of the 50 analysts who have coverage on SBI, 44 have a "buy" rating and six have a "hold rating.
SBI shares were trading 1.4% lower at 1,082 apiece at 9 am on Monday. The stock has gained 10% this year, so far.
Also Read: BSE launches index to track listed REITs: Key details explained
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