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Target: ₹1,015
CMP: ₹811.10
State Bank of India (SBI) reported Q1-FY25 PAT of ₹17,040 crore (up 1 per cent y-o-y , in line), driven by controlled opex. NII grew 5.7 per cent y-o-y to ₹41,130 crore (4 per cent miss). NIMs moderated 8bp QoQ to 3.22 per cent.
Opex growth was under control at 1 per cent y-o-y to ₹25,840 crore (9 per cent lower than MOFSLe), resulting in 5 per cent y-o-y growth in PPoP to ₹26,450 crore (in line).
Loan book grew 16 per cent y-o-y/1 per cent q-o-q, while deposits grew 8 per cent y-o-y (flat q-o-q). CASA ratio moderated 41bp q-o-q to 40.7 per cent. Fresh slippages stood at ₹7,903 crore in a seasonally weak quarter (annualised slippage rate of 0.84%). Credit cost stood at 0.48 per cent vs. 0.32 per cent in Q1-FY24. GNPA ratio improved by 3 bps q-o-q to 2.2 per cent, while NNPA ratio was flat at 0.6 per cent. PCR ratio declined 61 bps QoQ to 74.4 per cent. The bank guides FY25 credit cost at 0.5 per cent. Restructured book declined to ₹16,000 crore (0.4 per cent of advances), while SMA 1/2 portfolio stood at ₹4,600 crore (12 bps of loans).
We broadly maintain our earnings estimates and expect FY26 RoA/RoE of 1.1/18.2 per cent. Reiterate Buy with a TP of ₹1,015 (1.5x FY26E ABV)
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