More Stories

Informist, Tuesday, Aug. 4, 2026

By Kabir Sharma

MUMBAI – The mammoth of the banking sector, State Bank of India, is expected to report a resilient set of earnings for the June quarter, supported by steady credit growth, healthy business expansion, and stable asset quality. However, pressure on net interest margin due to elevated deposit costs and higher provisioning are likely to limit profit growth for the quarter.

SBI, the country's largest lender, is expected to report net interest income of INR 455.91 billion, up around 11% from a year earlier and 2.7% sequentially, according to the average of estimates from 15 brokerages. Net profit is estimated at INR 194.31 billion, reflecting a modest 1.4% on-year increase, but a 1.3% sequential decline due to higher credit costs and softer non-interest income.

Brokerage estimates for net interest income range from INR 444.30 billion by Dolat Capital Market to INR 465.97 billion by Anand Rathi Share and Stock Brokers Ltd. Net profit estimates show a much wider dispersion, with PhillipCapital (India) Pvt. Ltd. pegging it at INR 264.26 billion and Bank of America

Global Research projecting INR 134.01 billion. SBI had reported a 4% on-year rise in net interest income to INR 443.80 billion for the March quarter.

Robust loan growth is likely to remain the key driver of the lender's June quarter earnings. Most analysts expect advances to have expanded broadly in line with the banking industry during the quarter, supported by continued momentum in retail, agriculture, small and medium enterprise, and corporate lending. While overall credit growth is likely to remain healthy, SBI is expected to continue calibrating its corporate loan book in favour of better-yielding assets, a strategy its management has indicated will support profitability over the medium term. Gross advances were up 16.9% on year at INR 49.33 trillion as on Mar. 31.

Deposit mobilisation is also expected to remain healthy, although several brokerages believe its growth may have lagged credit expansion during the quarter. Analysts will closely monitor the bank's ability to mobilise deposits under the Reserve Bank of India's temporary Foreign Currency Non-Resident (Bank) deposit scheme, which has become an important funding avenue following the central bank's measures to attract foreign currency inflows. Management commentary on the pace of mobilisation and its impact on funding costs will be a key focus area. The bank had total deposits of INR 59.76 trillion as on Mar. 31, up 11.0% on year. 

Net interest margin is expected to remain broadly stable, although opinions differ on the extent of pressure from higher funding costs. Some brokerages expect margins to improve marginally because of a better loan mix and improved corporate spreads, while others expect a slight sequential decline of up to four basis points as term deposit repricing continues to weigh on funding costs. Overall, the consensus is that the increase in yields on advances is likely to broadly offset the rise in deposit costs, resulting in limited movement in margin during the quarter. The bank's margin also took a hit in the March quarter, with domestic net interest margin moderating to 2.93% from 3.11% in the December quarter. 

Fee income is expected to be relatively subdued because the first quarter of a financial year is seasonally weak, while treasury gains are likely to remain stable. Consequently, operating income growth is expected to be moderate despite healthy expansion in the loan book. On the expenditure front, analysts expect operating expenses to remain under control, with lower growth in other operating expenses supporting pre-provision operating profit. Some brokerages expect core pre-provision operating profit to rise sequentially despite muted fee income.

Asset quality is expected to remain one of SBI's strongest positives. Most analysts do not anticipate any major deterioration in stressed assets, although seasonal factors could result in slightly higher slippages during the quarter. The gross non-performing asset ratio is expected to remain broadly stable, with some estimates indicating a marginal increase of 2 bps, while others expect continued improvement in headline asset quality ratios. The gross NPA ratio fell to 1.49% as on Mar. 31 from 1.57% a quarter ago. The net NPA ratio was 0.39% as of Mar. 31, the same as a quarter ago.

Even with stable asset quality, provisions are expected to increase on a sequential basis. Analysts attribute this to normal first-quarter seasonality in slippages, lower recoveries and upgrades compared with the previous quarter, and a gradual normalisation of credit costs. Credit cost is expected to remain well within the bank's historical range of 0.3-0.4%, although several brokerages see it rising modestly compared with the March quarter. Provisions were down over 55% in the March quarter at INR 28.72 billion. Non-performing asset provisions declined to INR 31.40 billion in the March quarter from INR 39.64 billion a year ago. The provision coverage ratio was 74.36% as on Mar. 31.

Another important area of investor interest will be the management's outlook on loan growth, margins, and deposit mobilisation for the remainder of the financial year. Brokerages expect the management to provide updates on the sustainability of credit growth, particularly after indicating its intention to moderate corporate lending while focusing on higher-yielding segments. Commentary on the outlook for net interest margins, funding costs and the benefits from the Foreign Currency Non-Resident (Bank) deposit scheme will also be closely scrutinised.

SBI will detail its June quarter earnings on Friday. At 1104 IST, its shares traded at INR 1,040.20 apiece on the National Stock Exchange, down 0.5% from the previous close. The stock has been largely unchanged since the bank announced its March quarter results on May 8.

Of the 18 brokerage reports on the bank available with Informist, 16 have a "buy" call on the stock with the average target price of INR 1,189, which implies an upside potential of 17% over the current market price. Two brokerages have a "hold" recommendation at a target price of INR 1,055.

Following are the June quarter earnings estimates for State Bank of India in INR billion from 15 brokerages, in descending order of estimate of net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Shubhayan Bhattacharya

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.