SBI Share Price Target: Brokerage Recommends Buy Rating:

New Delhi: Brokerage firm Nuvama has issued a Buy rating for State Bank of India (SBI) shares, setting a 12-month target price of ₹950 per share. SBI's stock closed over 2% lower at ₹736.40 on February 7, 2025.

SBI Reports 84% Surge in Q3 Net Profit

SBI posted an 84% year-on-year (YoY) jump in net profit for Q3 FY2024-25, reaching ₹16,891 crore. This growth was driven by a lower base in the previous year, where the bank had reported a net profit of ₹9,164 crore for the same quarter.

Additionally, the core net interest income (NII) grew 4% YoY to ₹41,446 crore, reflecting steady revenue growth in its lending business.

SBI Q3 FY2024-25 Highlights

Net Profit: ₹16,891 crore, up 84.32% YoY
Operating Profit: ₹23,551 crore, up 15.81% YoY
Return on Assets (ROA) for 9M FY25: 1.09%
Return on Equity (ROE) for 9M FY25: 21.46%
Quarterly ROA: 1.04%, up 42 bps YoY
Net Interest Income (NII): ₹41,446 crore, up 4.09% YoY
Net Interest Margin (NIM) (Whole Bank) for 9M FY25: 3.12%
Net Interest Margin (NIM) (Domestic) for 9M FY25: 3.25%
NIM for Q3 FY25 (Whole Bank): 3.01%
NIM for Q3 FY25 (Domestic): 3.15%

Shifting Customer Preferences Impacting Net Interest Margins

SBI Chairman CS Setty highlighted that the decline in Net Interest Margin (NIM) was due to a shift in customer saving behavior. He noted that more people are opting for high-yielding fixed deposits (FDs) instead of low-cost current and savings accounts (CASA).

“There is a shift in saving behavior that, in my view, is irreversible. While there may be some movement from investments to savings, the preference for generating higher returns on deposits is here to stay,” said Setty.

He also pointed out that the government’s management of cash flows has impacted current account balances, making it challenging to maintain high CASA levels.

While SBI faces pressure on margins, its strong profitability and steady loan growth continue to make it an attractive long-term investment, as reflected in Nuvama’s Buy rating with a ₹950 target price.