SBI Share Price Target: How To Trade SBI Shares After Q2 Performance Beats D-Street Expectations?

With a balance sheet worth over Rs 63 lakh crore, SBI is the largest bank in India and a public sector institution. On November 8, the bank announced its Q2FY25 results, which surpassed D-Street's projections. SBI reported consistent performance, with other income-supporting earnings and asset quality remaining stable. Strong treasury contributions, recovery, and moderate opex growth contributed to earnings exceeding expectations. The bank also delivered another quarter of consistent financial performance across all metrics, including robust profitability and business growth, and maintaining flawless asset quality. SBI shares were trading higher after the Q2 results, and they ended Monday's trading session up 0.33% at Rs 845.95 each.

SBI Q2 Results Highlights

In Q2FY25, the bank's operating profit increased 50.87% YoY to Rs 29,294 crores, while its net profit for the same period was Rs 18,331 crores, a YoY growth of 27.92%.

According to SBI, its Net Interest Income (NII) increased by 5.37% YoY to Rs 41,620 crore for Q2FY25.

According to SBI, its ROE and ROA for the half-year were 21.78% and 1.13%, respectively, while its ROA for the quarter improved by 16 basis points YoY to 1.17%.

CASA deposits grew at 4.24%, while SBI's net bank deposits grew by 9.13% annually. The CASA ratio was 40.03% on September 30.

SBI's Gross Non-Performing Asset (NPA) ratio improved by 42 basis points YoY to 2.13%, while its Net NPA ratio improved by 11 basis points to 0.53%.

SBI Share Price Target By Nirmal Bang

CMP: Rs843 | Target Price (TP): Rs1,065 | Upside: 26%

"We have valued SBI's standalone business at 1.5x Sept'26E ABV (the same as earlier). Adding subsidiary value per share of Rs246.4, we derive our target price (TP) of Rs1,065 (as against Rs 1,059 earlier). Our target multiple is at a 13.7% premium to past 5-year average multiple of 1.3x ABV. We are positive on SBI for the long-term considering the bank's leadership position in Corporate and Retail (which enables it to choose the best quality credit), ample liquidity on balance sheet (providing stability to its margins) and pristine asset quality (standard provision buffer of 0.8% provides added comfort). We maintain BUY on SBI," said the brokerage in a note.

SBI Share Price Target By PhillipCapital (India)

"Earnings was above estimate due to strong treasury contribution, recovery and moderate opex growth. Credit cost was within guided range. SBI to maintain deposit market share hence incremental credit to be funded by incremental deposit. The decline in domestic CD ratio weighs on the margin. We have not changed our credit cost estimate for FY25 as we have been factoring credit cost of 50bps. We remain constructive on SBI given its healthy return ratios, well positioned balance sheet to capitalise growth and strong subsidiary performance," said the brokerage.

"Sustainability in credit growth, operating leverage & stable NIM to drive core earnings. Credit cost to remain low at 0.5% in next few years, translating into ~1% ROA between FY25-27E. Maintain Buy with a TP of Rs 950 (earlier Rs 960). At CMP, stock trades at 1.5x/1.3x/1.1X FY25E/26E core ABVPS of Rs 429/490/555 (subs. Value of Rs 232 per share)," the brokerage further added.

SBI Share Price Target By ICICI Direct Research

"SBI has demonstrated its strength in the last few quarters both on core operating performance and asset quality. Management remains confident on growth, maintenance of margins and steady RoA. Sustained balance sheet growth (13-15%), strong liabilities franchise and prudent asset quality is expected to aid RoA at ~1% in FY25-26E. Rolling to FY27E, we value standalone bank at ~1.3x FY27E BV and subsidiaries at ~Rs 200/share, thus maintaining our target at Rs 1000 and Buy rating on the stock," said the brokerage.

SBI Share Price Target By Axis Securities

"SBI remains well poised to deliver a strong earnings growth of 12% CAGR over FY24-27E alongside maintaining RoA of 1-1.1% driven by (1) Strong growth while maintaining a comfortable LDR, (2) Focused efforts to improve fee income profile, (3) Contained Opex ratios and (4) Steady credit costs and strong asset quality. We continue to remain positive of the stock. Current Valuation: 1.4x Sep'26E ABV; Earlier Valuation: 1.5x FY26E ABV Current TP: Rs 1,040/share; Earlier TP: Rs 1,030/share Recommendation: We maintain our BUY recommendation on the stock," the brokerage commented.

SBI Share Price Target By JM Financial Institutional Securities

Sameer Bhise of JM Financial Institutional Securities said, "SBIN reported a PAT beat of +10% vs JMFe led by: i) NII growth of +5.4% YoY, +1.2% QoQ at INR 416bn even as NIMs declined 4bps QoQ, ii) higher other income (+42% YoY, +37% QoQ) led by higher MTM and trading gains of INR 46.4bn and recovery from written off accounts of INR 23.4bn, iii) lower opex (-11% YoY, +7% QoQ) led by lower employee costs resulting in PPoP beat of +9% vs JMFe at INR 293bn (+51% YoY, +11% QoQ), and iv) moderate credit costs of 43bps on total advances (vs 53bps QoQ). Net advances grew (+15.3% YoY, +2.9% QoQ) to INR 38,574bn while deposits grew (+9.1% YoY, +4.4% QoQ) to INR 51,173bn. Domestic CD ratio was 67.9% while overall CD ratio was 75.4%, CASA ratio declined to 40.03% (-185bps YoY, -66bps QoQ). Asset quality improved with GNPA declining by -8bps QoQ to 2.13% while Net NPA ratio was down -5bps QoQ at 0.53%. Fresh slippages moderated to INR 49.5bn (-43% QoQ) which led gross slippage ratio to decline -45bps QoQ to 55bps - retail slippages also remained low and mgmt exuded confidence w.r.t to unsecured portfolio (given that loans are predominantly towards salaried customers). Including profits for the quarter, CET1 ratio rose +21bps QoQ to 10.98% while CRAR rose +41bps QoQ to 14.79%. Management guided for steady NIMs followed by higher focus on other income which will be led by trading gains and steady recoveries from write-off pool. SBI's healthy growth momentum (along with room for CD-ratio expansion) place it favorably amongst larger banks. Also, asset quality performance continues to be encouraging and calls for further re-rating of the stock. We value the core bank at 1.5x FY26e BV to arrive at an unchanged, SOTP-based, Target Price of INR 1,050. Maintain BUY."

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.