SBI is likely to report healthy growth in March quarter profit, boosted by stake sale in SBI Cards through IPO, recovery from some NPA accounts and lower tax cost.
State Bank of India (SBI) share price was up 3 percent in the morning trade on June 5 ahead of the bank's Q4 results.
The stock is one of the top index gainers and is also one of the most active stocks on NSE in terms of volumes.
The scrip has jumped over 17 percent in the last 15 days and was quoting at Rs 180.80, up Rs 6.75, or 3.88 percent. It has touched an intraday high of Rs 180.85 and an intraday low of Rs 176.00.
The country's largest lender is likely to report healthy growth in March quarter profit, boosted by stake sale in SBI Cards through IPO, recovery from some NPA accounts and lower tax cost.
According to brokerages, the profit growth could be in the range of 600-1,000 percent in Q4 compared to same period last year, while net interest income is likely to be in double digits (YoY) but lower than normal due to moderate growth in advances and steady net interest margin.
According to HDFC Securities, profit is expected to grow 10 percent QoQ, partially aided by the lower tax rate (opted for new tax regime in Q3). "On a YoY basis, PAT is expected to grow 7.3x (on smaller base). NII may grow 12 percent YoY and loan growth is expected to moderate to around 3 percent YoY (7 percent in Q3)."
Provisions are expected to be lower due to recovery though there could be some COVID-19 impact, while asset quality is likely to be stable though slippages may remain elevated a bit.
"We expect a volatile performance due to recovery in NPLs (Alok Industries and a few smaller ones) as the accounting treatment is likely to be different for each recovery. Loan growth will be subdued at around 7 percent YoY and NIM (core) unchanged QoQ at around 2.9 percent. Reported NIM would have one-off from NPL recovery. Treasury income will include gains on account of stake sale in SBI Cards," said Kotak Institutional Equities which sees 1,007 percent YoY growth in profit and 13.5 percent rise in net interest income in Q4.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
