SBI Q1 results today: Will NIM recover? Key expectations, target prices ahead of earnings

State Bank of India (SBI) is likely to report a 13 per cent year-on-year (YoY) jump in net interest income (NII), though profit estimates vary across brokerages. Provisions and slippages are expected to increase sequentially, analysts said. Net interest margin (NIM) for the PSU lender is not expected to recover from the weak Q4 print.

Systematix expects the state-run lender to report 13.3 per cent growth in net profit at Rs 21,713 crore 11.8 per cent rise in NII at Rs 45,938 crore. Provisions for the quarter are seen at Rs 3,678 crore, up 28.1 per cent quarter-on-quarter(QoQ) but down 22.7 per cent from YoY levels. Sequentially, advances growth could be in line with industry growth.

"The CoF and YoA are expected to remain stable and hence NIM are expected to be broadly stable. Sequentially, fee income is expected to be lower due to seasonality while the treasury income is expected to remain flat. Total opex is expected to be lower sequentially led by lower other opex. Slippages are expected to marginally increase sequentially. Further, provisions are expected to be higher sequentially leading to higher credit costs," the brokerage said.

MOFSL expects SBI to report a 3.9 per cent YoY drop in net profit at Rs 18,422 crore on 13.1 per cent YoY rise in NII at Rs 46,465 crore. This brokerage expects NIM to come in at 2.84 per cent after a sharp fall in Q4  amid TD repricing, offset by improvement in corporate spreads. This brokerage sees asset quality ratios to witness improvement.

Kotak Institutional Equities sees profit for SBI falling 10.4 per cent YoY to Rs 17,160 crore on 10 per cent rise in NII at Rs 45,197 crore.

"We expect operating profit to decline 6 per cent YoY led by lower income growth. We are building in 10 per cent YoY NII growth despite 17 per cent YoY loan growth due to higher cost of funds. We do not see a recovery in NIM in 1QFY27. We are building in slower fee income growth. We expect slippages at 1.1 per cent of loans but no fresh concerns are likely in any portfolio for the bank," it said.

SBI target prices

Ahead of its earnings, SBI shares have seen a couple of target price updates in August. Haitong International reiterated 'Outperform' with a target price of Rs 1,200 on August 6, while BNP Paribas maintained 'Neutral' with a target of Rs 1,130 on August 5. Investec has a target price of Rs 1,180 on SBI. Nomura has a 'Neutral' rating and a target of Rs 1,140, while IIFL and Ambit Capital have target prices of Rs 1,150 each.

The Bloomberg consensus target on the stock at Rs 1,207 implied 11 per cent potential upside ahead.