SBI Q1 Results Review - Seasonally Weak But Overall Investment Thesis Remains Broadly Intact: Yes Securities

Yes Securities Report

We maintain ‘Buy’ rating on State Bank of India with a revised price target of Rs 1035.

Asset quality -

SBI's gross non-performing asset additions amounted to Rs 87.07 billion for Q1 FY25, translating to an annualized slippage ratio of 0.9% for the quarter. Gross NPA additions had amounted to Rs 39.84 billion during Q4 FY24. The management has stated that the sequentially higher slippages were due to seasonality in agri loans and some incremental slippages in personal loans but they don’t see any structural uptrend in slippages.

Of the fresh slippages of Rs 79 billion in Q1 the bank has already recovered Rs 16 billion in YTD Q2. Total loan loss provision was Rs 45.18 billion, up by 37% QoQ and 70% YoY, translating to an annualised credit cost of 48 bps. Of the total loan loss provision, Rs 19.76 billion pertains to slippages and Rs 24.73 billion pertains to ageing of assets. The bank has guided for a credit cost of 50 bps for FY25.

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