 "SBI Q4 preview: Profit may fall up to 38% YoY on higher opex, say analysts")
SBI Q4 results preview: State Bank of India (SBI) is all set to report its March quarter (Q4) results for financial year 2023-24 (FY24) on Thursday, May 9, 2024.
The growth in SBI's Q4FY24 net profit will likely depend on the one-time staff cost (higher salary provision) the bank may set aside during the quarter, analysts said.
Their estimate, thus, varies across a wide range from Rs 10,432 crore to Rs 14,743 crore. This compares with a net profit of Rs 16,694.5 crore reported in the same quarter last year (Q4FY23), and Rs 9,163.9 crore in the December quarter of FY24 (Q3FY24).
On the bourses, SBI stock hit a record high of Rs 834.6 apiece on April 30, 2024. Thus far in calendar year 2024, the stock has gained 25 per cent on the BSE, while in the financial year 2024-25 (FY25), it has gained 6.5 per cent.
By comparison, the S&P BSE Sensex is up around 2 per cent so far in CY24.
Here's what key brokerages expect from SBI Q4FY24 results:
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Nomura
The brokerage expects SBI's Q4 net profit to fall 21 per cent year-on-year (Y-o-Y), but rise 44 per cent quarter-on-quarter (Q-o-Q) to Rs 13,200 crore.
Operationally, it sees pre-provision profit (PPoP) falling 21 per cent Y-o-Y and 5 per cent Q-o-Q to Rs 19,340 crore as against Rs 24,620 crore in Q4FY23 and Rs 20,340 crore in Q3FY24.
Net interest income (NII), too, is estimated to stay flat at Rs 41,330 crore as against Rs 40,390 crore in Q4Fy23 (up 2 per cent Y-o-Y), and Rs 39,820 crore in Q3FY24 (up 4 per cent Q-o-Q).
BNP Paribas
This brokerage pegs net profit at Rs 12,553.5 crore for Q4FY24, registering a drop of around 25 per cent on year, but a gain of 36 per cent quarterly.
This brokerage, too, sees a muted NII growth of 2.3 per cent Y-o-Y and 4 per cent Q-o-Q at Rs 41,328.7 crore.
Prabhudas Lilladher
Giving one of the most cautious estimates, this brokerage pegs NII growth at just 0.6 per cent Q-o-Q/down 0.8 per cent Y-o-Y at Rs 40,069.8 crore.
It sees loan growth at 5.5 per cent Q-o-Q and 16.1 per cent Y-o-Y at Rs 37.13 trillion. Margins, it said, could fall by 9bps sequentially.
PPoP will likely decline sharply by 27.7 per cent Q-o-Q/41 per cent Y-o-Y to Rs 14,659.5 crore on account of one-time staff cost of Rs 5,400 crore. Net profit, thus, may plunge 28 per cent Q-o-Q/37.5 per cent Y-o-Y to Rs 10,432 crore.
That Asset quality in terms of gross non-performing assets (GNPA) to improve further by 16bps.
Nirmal Bang Institutional Equities
Riding on the back of steady PPoP (Rs 24,623.9 crore), Nirmal bang projects a 61 per cent Q-o-Q surge in Q4FY24 net profit at Rs 14,743 crore. This would be roughly 12 per cent lower on a Y-o-Y basis.
Kotak Institutional Equities
KIE expects operating profit to decline 22.4 per cent Y-o-Y, on the back of higher operating expenses, to Rs 19,099.7 crore. Operating expenses, the brokerage said, would be higher due to wage revision-related costs (final settlement impact).
It is building in flat NII growth at Rs 40,210.4 crore due to 14 per cent Y-oY loan growth.
"We are building in NIM to decline ~10 bps Q-o-Q but there is some scope for an improvement in the re-pricing of loans upward, which can partially offset the pressure of higher cost of funds," it added.
It expects slippages at 1.2 per cent of loans as the overall loans are holding up well. SBI will likely see lower recovery and upgrades as well.
Key discussion would be NIM, RoE, unsecured loans and CAR for the quarter.