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Motilal Oswal Report
India's largest public sector bank State Bank of India reported a strong all-round performance, led by robust business growth, margin expansion and healthy asset quality. Net interest margin expanded 2 basis points QoQ to 2.99% and domestic NIMs stood at 3.12%. The bank expects NIM at 3%+ in FY26 and in the long term. PAT was driven by fee-based income. Cost to income ratio is expected to remain around ~50%.
Credit growth was healthy at 15.6% YoY, while a robust credit pipeline is expected to support a healthy outlook going forward.
Management raised FY26 credit growth guidance to 13-15% (vs 12-14% earlier). Asset quality improved further, with slippages moderating and credit cost staying benign at 29bp.
The bank sounded confident about the overall credit environment.
Motilal Oswal increase its earnings estimates by 3%/4.3% for FY27/28E and estimate FY27E RoA/RoE at 1.1%/15.9%. Reiterate Buy with a revised target price of Rs 1,300 (1.4x FY28E adjusted book value + Rs 354 for subs).
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ALSO READ: SBI Bank Raises Its Credit Growth Guidance To 14-15% For FY26 Up From 12-13%
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