Ahead of its Q2 results later today, the State bank of India (SBI)’s shares touched a new high of Rs 528.25, up 1 per cent on the BSE in Wednesday’s intra-day trade.
The stock exceeded its previous high of Rs 526.70, which it hit on October 27, 2021. It was trading higher for the fourth straight day, gaining 5 per cent during the same period, reported Business Standard.
According to the report, SBI continues to be the best bet in the process of a gradual recovery in the Indian economy, with a healthy PCR, Tier I of around 11.3 per cent, robust liability franchise and improved core operating profit among PSU banks.
As far its Q2 results is concerned, the bank is anticipated to see considerable growth in its profit due to lower credit cost and provisions for bad loans, feel analysts.
Analysts feel the bank’s profit could see a growth of 50-100 per cent compared to the year-ago period, but there could be flat-to-moderate growth in net interest income, with high single digits loan growth YoY.
Here is what brokerage houses are saying:
KRChoksey Research
It expects healthy YoY PAT growth on account of improved margins and lower credit costs on a yearly basis. It believes the loan growth to be in the high single digits on a YoY basis, with a pickup in business activities. NII will show healthy sequential growth considering the lower cost of funds.
The brokerage sees profit to grow 49 per cent, net interest income half a percent (up 2.5 per cent QoQ).
ICICI Direct
NII is seen flat YoY, with loan growth expected to improve 8 per cent YoY and 9.5 per cent YoY growth in deposits. NIMs are seen being stable with expectations of firming up. The investment firm feels net profit is likely to grow 50 per cent YoY.
Kotak Institutional Equities
It expects slippages at 2 percent of loans (Rs 11,000 crore) mostly driven by SME and retail while corporate to hold up relatively well.
On the asset quality front, gross non-performing assets as a percentage of gross advances is expected to drop sequentially due to recovery in one NBFC account.
Overall, Kotak expects a solid positive commentary on the bank's retail/corporate loan book from an asset quality perspective.
