Analysts cut earnings, SBI share target price after mixed Q3 show; details

SBI share price: Average SBI share price target is around Rs 940 (range: Rs 700-1,025), suggesting an average upside potential of 25 per cent, Bloomberg data shows

Weak deposit mobilisation and lower margins during the current financial year's October-December quarter (Q3) drove analysts to cut earnings estimates and target prices for State Bank of India (SBI). They, however, have maintained their 'buy' calls. Of the 49 brokerages that track SBI stock, 39 have 'buy' calls, 6 'hold', and 4 have 'sell' rating.  SBI reported a standalone net profit of Rs 16,891.44 crore for the Q3, an 84.3 per cent Y-o-Y jump. Sequentially, the public sector bank's Q3 profit fell 7.8 per cent. SBI share price fell 2.7 per cent intraday to a low of Rs 732 per share. It ended 2 per cent lower at Rs 737 against a 0.25 per cent dip in the benchmark BSE Sensex index.

 

 

Key brokerages on Q3 results:

 

Emkay Global Financial Services | Buy | Target Price: Rs 1,025 

At Rs 40.67 trillion, SBI's credit growth was enviably higher at 13.5 per cent Y-o-Y and 3.75 per cent Q-o-Q relative to the system and some large private banks, primarily due to sustained strong momentum in the RAM book and sequential improvement in the corporate book. Amid weak CASA growth (down 84 bps Q-o-Q to 38 per cent) and a higher bulk deposit rate, SBI's cost of funds (CoFs) inched up to 0.24 per cent in Q3FY25 from 0.21 per cent in Q3FY24. We cut earnings estimates for FY25-27 by 2-3 per cent.

 

Nuvama Institutional Equities | Buy | Target: Rs 950 (from Rs 1,026) 

The bank has hiked Marginal Cost of Funds Based Lending Rate (MCLR) during the first nine months of the current financial year (9MFY25), whose positive impact could be seen on NIM in Q4FY25. In terms of MCLR repricing, the management sees headroom for 35bps repricing, but it will not be able to hike MCLR if the rate cut cycle starts. We cut net interest margin (NII) estimates by 2.2 per cent for FY25 and 4 per cent for FY26. Net profit estimate stands tweaked by +1.1 per cent for FY25 but -3.2 per cent for FY26.

 

Motilal Oswal Financial Services | Buy | Target: Rs 925 

The brokerage has cut its earnings estimates by 1.7 per cent and 3.4 per cent for FY26 and FY27, respectively. It has reiterated its 'buy' rating with a lower share price target of Rs 925.

 

HDFC Securities | Buy |Target Rs 1,070

 

SBI's Q3FY25 earnings missed tour estimates owing to lower treasury/mark-to-market (MTM) gains and softer margins, offset by strong operational performance and reversal of standard asset provisions.

 

JM Financial Institutional Securities | Buy | Target: Rs 940 (from Rs 1,050) 

"While the bank is well placed in terms of growth among peers in a deposit-crunched environment, adroit NIM management in the wake of rate cuts and prudent oversight on asset quality would be the key monitorables. We revise our FY25/FY26 earnings estimates by +1.6 per cent/-10 per cent and cut our target price to Rs 940," it said while maintaining 'buy'.