State Bank of India shares have declined about 10 percent over the last two trading sessions following the state-run lender's March quarter results. According to reports from Moneycontrol, the stock fell 4.35 percent to an intraday low of ₹975 per share on Monday's trade, after settling 6.7 percent lower at ₹1,019.30 on Friday. The stock has now declined for a third straight session and is down more than 11 percent since Thursday, even before the March quarter earnings were announced.
SBI achieved its second-highest annual corporate profit of ₹83,299 crore for FY25, marking a significant milestone despite investor concerns over margin pressures. The bank reported a 6 percent year-on-year rise in standalone net profit to ₹19,684 crore for the January-March quarter, compared with ₹18,643 crore in the year-ago period. However, as reported by Reuters-LSEG data, the figure was below analysts' estimates of ₹20,312 crore. The bank's total income during the quarter declined to ₹1,40,412 crore from ₹1,43,876 crore in the corresponding period a year ago, with the sharper decline attributed to lower treasury income despite healthy growth in core lending operations.
Chairman CS Setty expressed confidence that the worst is over for margin pressures, with Net Interest Margins expected to stabilize around 3 percent through recalibration of asset mix, CASA-led deposit growth and lower dependence on high-cost bulk deposits. According to The Economic Times, the bank anticipates robust loan expansion across all segments while closely monitoring global risks. Brokerage firm Emkay Global Financial Services had earlier noted that margins declined sharply by 18 basis points quarter-on-quarter to 2.8 percent, attributed to higher growth in the low-yielding corporate portfolio benchmarked on T-Bills and the full impact of recent repo rate cuts.
The bank's asset quality improved during the quarter, with gross non-performing assets as a percentage of total loans falling to 1.49 percent at the end of March from 1.57 percent at the end of December and 1.82 percent a year earlier. This improvement in asset quality provides positive momentum despite the margin pressures faced by the lender. Chairman Setty expressed confidence in continued credit growth for the current fiscal year, with the bank reporting strong deposit growth and anticipating robust loan expansion across all segments.
Analysts at Axis Securities noted that net interest margins witnessed a temporary blip in the fourth quarter, but management remains confident of sustaining domestic NIMs at around 3 percent through recalibration of asset mix, CASA-led deposit growth and lower dependence on high-cost bulk deposits. Axis Securities expects SBI to deliver healthy broad-based credit growth and a normalised return on assets of around 1 percent and return on equity of 15 percent. Market expert Sudip Bandyopadhyay sees opportunities in State Bank of India and a generational re-rating for the pharma sector, while advising investors to build long-term portfolios by picking quality stocks across key sectors.
