The profit was higher than the Street estimate of Rs 16,695 crore.
Here’s what brokerages say:
Nomura
Global brokerage firm Nomura mentioned that the PSU lender gave an all-round strong performance. While lower opex in Q4 was aided by lower wage revision, the LDR stood at 75%, still the lowest among large banks with substantial room to expand. The management also expects the opex ratios to trend lower going forward.
Nomura has retained its ‘buy’ rating for SBI with a target price of Rs 1,000.
JP Morgan
JP Morgan states that SBI’s FY24 print shows that the growth and ROE gap with the private banks has closed out and that they foresee a similar dynamic in the coming year as well. The brokerage firm also believes that SBI’s positioning is enviable with the growth pick up in corporate loans, low pressure on opex and a favourable asset quality environment.“Despite potentially lower recovery income in FY25, we think the bank can continue to print 1%+ ROA,” added JP Morgan.
JP Morgan has increased the target price to Rs 1,000 while maintaining a ‘buy’ view.
Nuvama
Nuvama increased FY25/26 EPS by 14%/12% to factor in higher growth and NIM. With the RoA likely to stay above 1% and an RoE of 17% through FY26E, the brokerage firm lifted the target valuation to 1.5x from 1.3x. Given a low LDR, stable asset quality, write-back of 50bp to CET1 from new investment norms and strong outlook, they expect SBI to outperform.
It reiterated ‘buy’ rating for SBI, with a target of Rs 950.
Kotak Institutional Equities
The brokerage firm stated that the macro environment continues to be fairly stable for lenders and they see relatively stable performance from SBI. Even as they maintained SBI as a top pick, they emphasised that they don’t see a sharp outperformance from current levels. KIE valued the bank at 1.5X (adjusted) book and 10X FY2026E EPS for RoEs of 15%. The valuations are now closer to frontline private banks implying that the risk-reward has diminished even if the business is in a relatively strong position.
KIE maintained a ‘buy’ rating with a revised target price of RS 950 from an earlier Rs 850.
Motilal Oswal
“SBIN has made a swift recovery in earnings, from a loss of ~INR65b in FY18 to profits of INR611b in FY24. We also note that the cumulative profit of the bank over the past three years (FY22-24) is equivalent to what the bank earned in the prior 20 years combined. We believe that SBIN is well positioned to deliver steady earnings, with FY26E RoA/RoE of 1.1%/18.5%,” stated a report by the brokerage firm.
Motilal kept the rating unchanged as ‘buy’ with an increased target price of Rs 820.
Emkay Global
Building on the healthy NIMs/fees, treasury gains, lower opex, and contained LLP, Emkay Global estimates that a trend is likely across PSBs, more so in SBI, as they raised FY25-26E earnings 9-14%. The brokerage firm expects sustained strong RoA/RoE @1.1%/17-18%.
“Though it claims it is comfortable funding growth in FY25, we believe the Bank would raise capital at >1x BV to fund its LT growth aspirations, given the favorable market conditions,” added Emkay Global.
The domestic brokerage firm has raised its target for SBI to Rs 950 while retaining a ‘buy’ view on the stock.
The shares of SBI were trading 1% higher at Rs 827 on BSE around 10 am.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
