Brokerages expect the company’s profit after tax (PAT) in the range of Rs 17,700–Rs 18,800 crore, implying a 2 to 17% YoY decline while an even sharper sequential fall up to 20%. The revenue estimates range between Rs 40,500–Rs 41,440 crore, implying a flat to 2.7% downtick.
The estimates from Nomura, Emkay Research, JM Financial and Axis Direct have been taken into account.
India’s largest PSU bank by way of market capitalisation will announce its earnings on Tuesday, November 4. Here’s what brokerages expect:
1. PAT
– Nomura pegs PAT at Rs 17,730 crore (-3% YoY, -7% QoQ)
– Emkay expects Rs 18,771 crore (+2.4% YoY, -2% QoQ)
– JM Financial forecasts Rs 17,702 crore (-3.4% YoY, -7.6% QoQ)
– Axis Direct is more conservative, projecting Rs 15,282 crore (-16.6% YoY, -20.2% QoQ).
Overall, a softer bottom line is anticipated due to lower operating income and flat net interest income growth.
2. NII
SBI’s NII is expected to remain largely flat YoY amid rising funding costs and subdued treasury gains.
– Nomura: Rs 41,440 crore, flat YoY and 1% QoQ
– Emkay Research: Rs 41,172 crore, down 1.1% YoY and up 0.2% QoQ
– JM Financial: Rs 41,165 crore, down 1.1% YoY and up 0.2% QoQ
– Axis Direct: Rs 40,499 crore, down 2.7% YoY and down -1.4% QOQ
Margin compression and slower repricing of assets are seen limiting NII growth, said Axis Direct in a brokerage note.
3. NIMs
Margins are expected to contract further due to higher cost of deposits and slower loan yield transmission.
– Nomura pegs NIMs at 2.8%, down 32 bps YoY and 8 bps QoQ
– JM Financial expects NIM at 2.6%, down 29 bps YoY and down 7bps QoQ
Brokerages broadly agree that margin pressure remains visible, though the impact may stabilise going forward.
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4. Pre-Provision Operating Profit (PPOP)
Operating performance is expected to soften due to lower treasury gains and modest NII growth.
– Nomura: Rs 28,300 crore (-3% YoY, -7% QoQ)
– Emkay: Rs 28,028 crore (-4.3% YoY, -8.2% QoQ)
– JM Financial: Rs 28,102 crore (-4.1% YoY, -8% QoQ)
– Axis Direct: Rs 25,703 crore (-12.3% YoY, -15.8% QoQ)
The moderation in PPOP is attributed to weak fee income and pressure on margins.
5. Provisions
– Nomura: Rs 4,600 crore, up 2% YoY and down 3% QoQ
– Axis Direct: Rs 5,138 crore, up 14% YoY and up 8% QoQ
Axis Direct expects a slightly higher Rs 5,138 crore (+14% YoY).
Most brokerages believe slippages and credit costs remain under control, indicating no major stress in the loan book.
6. Loans & deposits
Loan growth remains the bright spot, driven by retail and corporate segments.
– Nomura: Loans Rs 43.22 lakh crore (+12% YoY, +3% QoQ) while deposits are seen at Rs 55.83 lakh crore (+9% YoY, +2% QoQ).
– JM Financial: Loans at Rs 43.09 lakh crore, up 11.7% YoY and up 2.7% QoQ while deposits at Rs 56.10 lakh crore, up 9.6% YoY and up 2.5% QoQ.
7. Credit cost
Credit cost is expected to remain benign, indicating continued asset quality stability.
– Nomura: 0.5% (down 5 bps YoY, 3 bps QoQ)
– JM Financial: 0.4% (down 6 bps YoY, 4 bps QoQ)
8. Key monitorables
Brokerages will keep a track on outlook on NIMs amid a rising cost of funds environment.
Loan growth trajectory across retail and corporate segments will be another key monitorable.
Investors should also watch out for management commentary on asset quality trends, slippages, and recoveries and guidance on credit costs and deposit mobilisation strategy.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)