SBI Q1 Earnings Preview: Analysts Expect Modest PAT Growth Amid Muted NII and Narrowing Margins

SBI Q1 results expected to show moderate PAT growth, with analysts forecasting a 6.4% YoY rise to ₹18,128 crore, but a 2.8% drop sequentially. NII growth is expected to be muted due to margin pressure and elevated provisions. Key metrics to watch include PAT, NII, NIMs, PPoP, asset quality, loans, and deposits.

State Bank of India (SBI) is expected to announce its Q1 FY26 results on Friday, with analysts predicting a mixed performance. The bank's bottom-line growth is anticipated to remain moderate, driven by contracting net interest margins (NIMs), rising provisions, and flat loan growth. Key metrics to monitor include PAT, NII, NIMs, PPoP, asset quality, loans, and deposits.

The net profit after tax (PAT) is estimated to be between Rs 16,530 crore and Rs 19,576 crore, according to estimates from five brokerages. While four brokerages expect a flat-to-15% year-on-year (YoY) growth, one expects a 3% decline. Emkay Research estimates PAT at Rs 18,128 crore, up 6.4% YoY and down 2.8% sequentially [1].

Net interest income (NII) and NIMs are expected to show muted growth due to margin pressure and elevated provisions. NII estimates range between Rs 40,520 crore and Rs 42,592 crore, with NIMs falling to 2.86%-2.9%, down 13-35 bps quarter-on-quarter (QoQ) [1].

Pre-provision operating profit (PPoP) is expected to decline sequentially but show steady YoY growth. Emkay Research estimates PPoP at Rs 27,736 crore, up 4.9% YoY and down 11.3% QoQ [1].

Asset quality remains a concern, with provisions and slippages expected to rise. Nomura projects provisions at Rs 5,170 crore, while Nuvama expects slippages at Rs 8,000 crore [1].

Loan growth is projected to be around 10-12% YoY but flat to slightly up QoQ. Deposit growth is expected to be between 8.7% and 11% YoY. Credit costs are expected to remain stable, with estimates ranging from 0.38% to 0.5% [1].

Overall, SBI's Q1 results are expected to show moderate PAT growth, with analysts highlighting the need to monitor margin trends, credit costs, and asset quality. Investors and financial professionals should closely watch these metrics to gauge the bank's performance and future prospects.

References:
[1] https://m.economictimes.com/markets/stocks/earnings/sbi-q1-results-preview-mixed-pat-growth-likely-muted-nii-seen-amid-margin-pressure-check-these-6-metrics/articleshow/123165659.cms