SBI's PAT grew by 12.5% YoY / 2.8% QoQ to Rs 191.6 billion. Treasury income growth of 144% YoY mainly supported the bottomline growth. Loan growth and deposit growth of 11.9% YoY and 11.7% YoY were better than industry growth of 9.6% YoY and 10.3% YoY respectively.
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Nirmal Bang Report
Stata Bank Of India's Q1 FY26 results were in line with our expectations at net interest income level and better than expectations at pre-provision operating profit / PAT level by 14.3% / 10.7% respectively.
SBI's PAT grew by 12.5% YoY / 2.8% QoQ to Rs 191.6 billion. Treasury income growth of 144% YoY mainly supported the bottomline growth. Loan growth and deposit growth of 11.9% YoY and 11.7% YoY were better than industry growth of 9.6% YoY and 10.3% YoY respectively.
Global net interest margin declined by 10 bps QoQ to 2.9%. The NIM performance of SBI was better than the industry which has seen ~20bps QoQ compression in margins. Gross non-performing asset /net non-performing asset stood stable at 1.83% / 0.47% in Q1 FY26 as against 1.82% / 0.47% in Q4 FY25.
We have estimated loan / earnings CAGR of 11.5% / 8.9% over FY25-FY27E which will lead to RoA / RoE of 1.1% / 14.8% in FY27E. We have valued SBI's standalone business at 1.3x June 2027E adjusted book value (same as earlier).
Adding subsidiary value per share of Rs 217.3, we derive our target price of Rs 1,001 (as against Rs 1,009 earlier).
Our target multiple is at 6% discount to five year average multiple of 1.38x. 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 0.7% provides added comfort).
Maintain ‘Buy'
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