SBI’s Q4FY25 net profit may fall 4.5–22% YoY amid higher provisions and softer pre-provision operating profit. While loan and deposit growth remains healthy, margin pressure and rising credit costs weigh on earnings. Analysts eye asset quality, capital raise plans, and return metrics.
AgenciesAnalysts eye asset quality, capital raise plans, and return metrics.
India’s largest public lender the State Bank of India (SBI) will announce its March quarter earnings on Saturday, May 3, 2025, where its net profit could fall sharply due to rise in bank’s provisions while its Pre-provision operating profit (PPoP) - a measure of its operational efficiency - could also take a hit.
According to the estimates of four brokerages, the profit after tax (PAT) in Q4FY25 could fall in a range of 4.5% to 22% on a year-on-year basis. The bottom line is seen in the range of Rs 16,208 crore and Rs 19,760 crore.
The estimates have been given by Nuvama Institutional Equities, ElaraCapital, IIFL Capital and JM Financial. While JM has the most bearish view on SBI’s PAT, Nuvama estimates show least decline.
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Notwithstanding this, the bank's net interest income (NII) could rise between 1% and 4% in the January-March quarter and be in the range of Rs 43,320 crore to Rs Rs 42,086 crore.
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The NII uptick will be on account of a steady loan book though the relatively slower pace of deposits could have an impact on the cost of funds.
Nuvama
The state-run lender is expected to report a PAT of Rs 19,760 crore for the quarter ended March 31, 2025, marking a YoY decline of 4.5% but a sequential growth of 17%.
The NII is pegged at Rs 42,690 crore, which will likely be up 2.5% YoY and 3% QoQ, reflecting moderate growth in core lending operations. However, net interest margins (NIMs) may contract by 32 basis points YoY and by 3 basis points QoQ to 2.98%, indicating some pressure on lending profitability.
Pre-provision operating profit (PPoP) for the quarter is expected to come around Rs 27,290 crore, going down 5% YoY and up 16% QoQ.
On the business front, the bank’s loan book expanded to Rs 41.65 lakh crore at the end of the March 2025 quarter, registering a robust 12.4% YoY growth and a 4% increase on a quarterly basis. Meanwhile, the deposits grew to Rs 53.86 lakh crore, up 9.6% YoY and 3% QoQ.
Fresh slippages may stand at Rs 4,000 crore, a marginal 0.4% rise YoY but improved on a sequential basis with a 3.5% QoQ decline, suggesting some stability in asset quality.
ElaraCapital
Elara expects the company’s Q4FY25 PAT at Rs 17,657 crore for the quarter, reflecting a 15% decline year-on-year but a 4.5% increase sequentially. Net interest income (NII) is expected to rise to Rs 43,004 crore, up 3.2% YoY and 3.8% QoQ.
NIMs are likely to come around 3.2%, down 15 basis points on a yearly basis but improved by 14 basis points QoQ. Pre-provision operating profit (PPoP) is seen at Rs 26,900 crore, showing a 6.4% decline YoY but a strong 14.2% rise QoQ.
The bank’s loan book may expand to Rs 42.13 lakh crore, registering a healthy growth of 14% YoY and 5.2% QoQ. Deposits could increase to Rs 54.80 lakh crore, going up 12% YoY and 4.8% QoQ.
However, provisions are expected to surge to Rs 3,304 crore, marking a significant jump of 105.2% YoY and 263% QoQ.
“We expect strong loan growth of 13-14% YoY, largely supported by growth in retail and SME segments. We expect NIIM to be lower (down 3-5bps QoQ), impacted by sticky funding cost and turning rate tables. Asset quality should sustain with curtailed slippages,”
Elara said that better recovery and upgrade will help sustain benefits on GNPLs. “With strong coverage levels, we expect credit costs to be curtailed. The management commentary on RoA sustainability and capital raise will be the key monitorable,” it said.
IIFL Capital
IIFL Capital expects a net profit of Rs 17,410 crore for Q4FY25, reflecting a 16% decline YoY and a 3% sequential drop. The fall in profits was largely driven by higher provisioning and a decline in pre-provision operating performance, despite growth in net interest income. The company's NII could rise to Rs 43,320 crore, an increase of 4% YoY and 5% QoQ.
As for PPoP, an 8% YoY and 13% QoQ decline is seen at Rs 26,570 crore.
The state lender's provisions could more than double to Rs 3,230 crore, gaining by 101% YoY and a steep 255% sequentially.
The loan book is likely to expand to Rs 41,94,600 crore, recording a 13% increase on a YoY basis and 5% growth sequentially. Meanwhile, the deposits may stand at Rs 54,06,000 crore, reflecting a 10% YoY growth and 3% QoQ rise. Although deposits have grown steadily, the slower pace compared to loans could raise funding cost concerns going forward.
JM Financial
JM Financial estimated the PAT at Rs 16,208 crore for Q4FY25, representing a sharp 22% decline YoY and a 4% fall QoQ. The NII could be reported at Rs 42,086 crore, a modest growth of 1% YoY and 1.5% QoQ.
The pre-provision operating profit is likely to be reported at Rs 23,668 crore, marking an 18% YoY decline. On a sequential basis, PPoP remained largely stable with only a 0.5% decline.
Bank's loan growth moderated to 13% YoY in Q4FY25, down from 16% in Q4FY24. Sequentially, it grew by 14%. Deposits on the other hand, are expected to rise by 10.2% YoY in Q4FY25, slightly lower than the 11.1% growth in Q4FY24. Sequentially, deposit growth improved from 9.8% in Q3FY25.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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