Earnings Outlook
State Bank of India Jan-Mar net profit seen 15% lower YoY on higher provisions
This story was originally published at 13:39 IST on 30 April 2025
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By Kshipra Petkar
MUMBAI – State Bank of India is expected to post a sizeable year-on-year fall in its net profit for the quarter ended March, with analysts forecasting that provisions made by the country's largest lender likely rose sharply. According to the average of estimates by 16 brokerages, SBI's bottom line is seen falling 15% on year to INR 175.70 billion in Jan-Mar. Estimates for the net profit are in the range of INR 117.58 billion and INR 197.01 billion.
According to Emkay Global Financial Services, higher seasonal agricultural bad loans will drive up slippages sequentially for SBI in Jan-Mar, with YES Securities pointing out that provisions will be higher from Oct-Dec, which saw a reversal. As a result, the bank's credit cost is seen normalising to around 0.5% from "currently low levels", according to Nomura Equity Research.
In Oct-Dec, SBI's provisions, net of write backs, was INR 9.11 billion due to a large corporate account restructured during the pandemic exiting from the restructured standard category. Fresh slippages in the third quarter of 2024-25 (Apr-Mar) stood at INR 38.23 billion, with credit cost at 0.24%.
Emkay Global, Nomura, and YES Securities all have 'buy' ratings on SBI shares, with their target price in the range of INR 1,025-INR 1,050. At 1322 IST, shares of SBI were down 2.8% at INR 789.85 on the National Stock Exchange. The state-owned lender will announce its quarterly earnings on Saturday.
To be sure, brokerages expect better recoveries in Jan-Mar compared to INR 12.06 billion of recoveries and upgrades in Oct-Dec, with an SBI-led consortium transferring their stressed loans belonging to Jaiprakash Associates--reportedly around INR 120 billion--to National Asset Reconstruction Co. Ltd.
On the business front, growth in SBI's net interest income is seen muted despite retail and small and medium enterprises segments driving a 13-14% increase in loans. According to the average of brokerages' estimates, net interest income in Jan-Mar may be just 3% higher both year-on-year and sequentially at INR 427.99 billion, in a range of INR 409.82 billion and INR 454.58 billion.
"We are building 2% year-on-year NII (net interest income) decline despite 12% year-on-year loan growth due to higher cost of funds and pass through of recent rate cuts," Kotak Institutional Equities said in a pre-earnings report. In Oct-Dec, SBI's domestic cost of deposits had edged up by 4 basis points to 5.07%. In terms of margins, the lender's net interest margin is expected to decline by 3-5 bps from 3.01% in Oct-Dec due to "sticky funding costs and turning rate tables," Elara Securities said.
Following are the Jan-Mar earnings estimates for State Bank of India based on reports from 16 brokerage firms in descending order by the estimate of net profit:
| Brokerages | Net interest income (INR billion) | Net profit (INR billion) |
| Nirmal Bang Equities Pvt Ltd | 454.58 | 197.01 |
| Emkay Global Financial Services Ltd | 427.24 | 196.69 |
| Equirus Securities Pvt Ltd | 426.02 | 196.36 |
| PhillipCapital (India) Pvt Ltd | 421.15 | 192.31 |
| Sharekhan Ltd | 427.04 | 190.23 |
| YES Securities (India) Ltd | 429.11 | 187.27 |
| Motilal Oswal Financial Services Ltd | 427.39 | 185.55 |
| Ashika Stock Broking Ltd | 426.11 | 184.42 |
| Dolat Capital Market Pvt Ltd | 429.10 | 177.30 |
| Elara Securities (India) Pvt Ltd | 430.04 | 176.57 |
| Nomura Equity Research | 430.10 | 175.10 |
| IIFL Capital Services Ltd | 433.20 | 174.10 |
| JM Financial Institutional Securities Pvt Ltd | 420.86 | 162.08 |
| Prabhudas Lilladher Pvt Ltd | 424.00 | 150.38 |
| Anand Rathi Share and Stock Brokers Ltd | 432.11 | 148.32 |
| Kotak Institutional Equities | 409.82 | 117.58 |
| AVERAGE | 427.99 | 175.70 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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