SBI Q3 Review — Motilal Oswal Reiterates 'Buy', Says Robust Asset Quality; Lower Provisions Drive Earnings

SBI has guided for overall deposit growth of 10% YoY. The bank has seen an increase in its domestic CD ratio to ~68.9%. Fresh slippages and credit costs were contained, which underscores improvements in underwriting standards..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.State Bank of India reported a mixed quarter as the provisioning reversal boosted earnings, while margins moderated 13 basis points QoQ. Other income too reported a miss, affected by weak treasury/forex performance. The bank now expects net interest margins to remain above 3%, supported by levers such as credit-deposit ratio and Marginal Cost Of Funds Based Lending Rate repricing (20 bp utilized, 35bp cushion in MCLR pricing). Credit growth was healthy, while the unsecured book (Xpress Credit) saw modest growth. Deposit growth was modest, while current account savings account growth remained under pressure. SBI has guided for overall deposit growth of 10% YoY. The bank has seen an increase in its domestic CD ratio to ~68.9%. Fresh slippages and credit costs were contained, which underscores improvements in underwriting standards. Restructured book was well under control at 0.34% of advances and the SMA pool was high due to one long-term government sector customer of the bank, with fund-based outstanding of Rs 58 billion.The account has been pulled back subsequently. Excluding this, SMA1&2 remained under control at 9bp of loans. We cut our earnings estimates by 1.7%/3.4% for FY26/FY27 and expect FY27 RoA/RoE of 1.05%/16.8%. We reiterate Buy with a target price of Rs 925 (1.2x FY27E adjusted book value)..Click on the attachment to read the full report:.SBI Q3 Results: Net Profit Meets Estimates, Asset Quality Improves.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

SBI Q3 Review — Motilal Oswal Reiterates 'Buy', Says Robust Asset Quality; Lower Provisions Drive Earnings

SBI's credit growth guidance remains at 14-16%, with broad-based growth across all segments, adds the brokerage.

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