SBI Q3 Results Review - Steady Quarter Excluding One-Time Pension Provisions: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.State Bank of India reported in-line net interest income growth at 5% YoY, with net interest margin at 3.2% (-7 basis points QoQ). Despite lower than expected credit costs (8 bps), profit after tax was impacted by one-time pension and dearness expense of Rs 71 billion, an unanticipated line item. Wage hike related provisions have been front-ended in FY24, and employee expense to decline in FY25. Asset quality metrics were steady with low slippages at 0.6% and marginal credit costs (reversal of provisions against restructured book). We build in lower credit costs of 22 bps for FY24E (versus 15 bps annualised in 9M) and 55- 60 bps for FY25/26E. Loan growth at 5% QoQ was strong and broad based across segments. Front-ending of wage hike has led to lower profit after tax for FY25E, but improved earnings profile for FY25-26E. Maintain 'Buy' with target price of Rs 750 (from Rs 730 earlier, led by improved subs valuations) against return on asset/return on equity of 1%/16% for FY25E (standalone bank valued at 1.3 times). Standalone bank trades at 1.1 times Sep-25E adjusted book value..Click on the attachment to read the full report:.SBI Q3 Results Review - Earnings Impacted By Wage Hike Related Provisions, One-Offs: Systematix.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

SBI Q3 Results Review - Steady Quarter Excluding One-Time Pension Provisions: Dolat Capital

Additionally, wage hike related provisions were partly front-ended in FY24 with Rs 63 billion provided in Q3 and Rs 54 billion to be made in Q4.

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SBI Q3 Results Review - Steady Quarter Excluding One-Time Pension Provisions: Dolat Capital

Additionally, wage hike related provisions were partly front-ended in FY24 with Rs 63 billion provided in Q3 and Rs 54 billion to be made in Q4.

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