SBI stock hits all-time high ahead of Q1 earnings, here's what to expect

State Bank of India (SBI) share hit all-time high ahead of the lender's Q1 earnings set to be announced today. SBI stock gained 0.75% to a record high of Rs 449.80 against previous close of Rs 446.45 on BSE.

SBI share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The large cap stock has gained 62% since the beginning of this year and risen 132.25% in one year.

In afternoon session, the share was trading flat at Rs 444 on BSE.

Market cap of the bank stood at Rs 3.96 lakh crore. Total 13.53 lakh shares changhed hands amounting to turnover of Rs 60.24 crore on BSE.

Brokerage firm Motilal Oswal Financial Services sees SBI's credit cost to remain high in Q1 to keep the balance sheet resilient.

While business growth may have moderated on a quarter-on-quarter (QoQ) basis, restructuring book and impact on asset quality will be the key to assessing the impact of the second wave of COVID-19, Motilal Oswal said.

SBI is likely to report a 39.1 percent year-on-year (YoY) rise in net profit, while operating profit may climb 6.5 per cent YoY, said the brokerage.

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Net interest income (NII), the difference between the interest income earned from lending activities and the interest paid to depositors, is seen climbing 7.9 per cent YoY and margins may remain stable at about 2.9 per cent.

Kotak Institutional Equities expects a 8 percent YoY rise in net interest income and sees profit surging 79.1 percent in Q1. "We expect an operating profit growth of 17 percent YoY, adjusted for one-off treasury gains of stake-sale in Q1FY21. We are building 8 percent NII growth on the back of subdued loan growth at nearly 4 percent YoY. NIM (core) may remain unchanged QoQ at about 3.1 percent. Income from written-off loans and low base in fee income will drive non-interest income growth," Kotak said.

The brokerage expects slippages at 2.5 per cent of loans, majorly driven by agriculture (seasonal slippages).

"We expect a solid positive commentary on the bank's retail and corporate loan book from an asset quality perspective," Kotak said.

Edelweiss Securities sees signals of weakness in business momentum due to the systemic slowdown. "Asset quality is likely to remain steady in the quarter (barring some challenges in agriculture book, more of seasonal in nature), however, recoveries would be limited. Key monitorable will be loan book under restructuring and performance of ECLGS pool," it said.