What Supports 'Buy' Call For SBI At Dalal Street?

Buy SBI Shares: With the current market price of State Bank of India's ( SBI 's) shares at Rs 800, and a target price at Rs 900, analysts at PL Capital recommend to purchase the shares of India's largest public lender.

SBI's Performance In Q4FY25

In the quarter ended March (Q4FY25), the State Bank of India's Net interest income (NII) rose 1.5 per cent to Rs 42,774 crore from Rs 41,655 crore in Q4FY24. This came on the backs of steady loan growth, though margins remained under pressure. This was slightly above the poll's forecast of Rs 42,465.7 crore.

The Mumbai-headquartered lender has also declared a dividend of Rs 15.90 per share for the financial year ended March 31, 2025. The record date for dividend is May 16 and payment on May 30.

The operating profit for the quarter rose 8.8 per cent to Rs 31,286 crore, while provisions increased 20.4 per cent year-on-year (YoY) to Rs 3,964 crore. The bank’s gross non-performing (NPA) ratio also improved to 1.82 per cent from 2.24 per cent a year earlier.

The bank’s net interest margin (NIM) for Q4FY25 was at 3.00 per cent for the whole bank and 3.15 per cent for domestic operations, down 47 basis points and 32 basis points respectively from the year-ago quarter. With core return on asset (RoA) of 0.9x in FY27, SBI's stock is trading at 1.0x.

Key Metric Trends To Follow

Credit growth is guided to be above system in FY26. This comes after factoring in a 12 per cent CAGR over FY25-27.

Meanwhile, the loan growth stands at 4.0  per cent quarter-on-quarter (QoQ) was broad based led by corporate (5.5 per cent), retail (4.1 per cent) and agriculture (3.6 per cent). The SME and overseas growth were soft at 1.9 per cent/1.3 per cent QoQ. Corporate saw softer growth mainly due to unusual prepayments as central PSUs utilized their equity funding to de-leverage.