Feb'25 View on State Bank of India

State Bank of India is a Fortune 500 company. It is an Indian Multinational, Public Sector banking and financial services statutory body headquartered in Mumbai. It is the largest and oldest bank in India with over 200 years of history. With stock lying in oversold category, it looks like to recover sharply with continuous improvement and move beyond 900 in coming months with positive inputs * SBI reported ~85% yoy earnings growth, led by 80% yoy operating profit growth (the base quarter had higher operating expenses). • It reported a ~10 bps decline in Net interest margin (NIM) (3.1%) but healthy loan growth (~15% yoy) and lower slippages (0.4%). • We are less worried about asset quality and maintain that valuations remain inexpensive. • Gross NPL ratio was flat qoq at ~2.1%, while net NPL ratio was also flat qoq at 0.5%. • Credit costs for the quarter declined sharply to ~10 bps (annualized). • Domestic advances grew by ~14% yoy and ~4% qoq. • Management indicated that there is sufficient headroom on the Credit-Deposit ratio to drive credit growth.