SBI
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On February 24, 2025, shares of the State Bank of India (SBI) fell to a 52-week low of ₹710.90, marking a significant decline from their 52-week high of ₹912.10 on June 3, 2024. This downturn was influenced by a downgrade from InCred Equities, which revised its rating on SBI from ‘Add’ to ‘Hold’ and reduced the target price from ₹1,100 to ₹795 per share. citeturn0search0
SBI InCred Equities’ Downgrade and Concerns
InCred Equities expressed concerns over the sustainability of SBI’s return on equity (RoE), which has averaged 16-17% in recent years. The brokerage anticipates a moderation to 13-14% during FY26-FY27, attributing this to normalizing credit costs and potential impacts from the repo rate cut cycle. Additionally, InCred forecasts a decline in return on assets (RoA) to 0.8% over the same period, down from approximately 1% in FY25. citeturn0search0
SBI’s Financial Performance
Despite these concerns, SBI reported robust financial results for the December 2024 quarter, with an 84% year-on-year increase in standalone net profit to ₹16,891 crore. The bank’s total income rose by 8.69% to ₹1,28,467 crore, On February 24, 2025, shares of the State Bank of India (SBI) fell to a 52-week low of ₹710.90, marking a significant decline from their 52-week high of ₹912.10 on June 3, 2024. This downturn was influenced by a downgrade from InCred Equities, which revised its rating on SBI from ‘Add’ to ‘Hold’ and reduced the target price from ₹1,100 to ₹795 per share.
SBI InCred Equities’ Downgrade and Concerns
InCred Equities expressed concerns over the sustainability of SBI’s return on equity (RoE), which has averaged 16-17% in recent years. The brokerage anticipates a moderation to 13-14% during FY26-FY27, attributing this to normalizing credit costs and potential impacts from the repo rate cut cycle. Additionally, InCred forecasts a decline in return on assets (RoA) to 0.8% over the same period, down from approximately 1% in FY25.
SBI’s Financial Performance
Despite these concerns, SBI reported robust financial results for the December 2024 quarter, with an 84% year-on-year increase in standalone net profit to ₹16,891 crore. The bank’s total income rose by 8.69% to ₹1,28,467 crore, and gross non-performing assets (NPAs) decreased to 2.07%. Net NPAs improved to 0.53% during this period.
SBI Market Reaction and Investor Considerations
The downgrade and subsequent share price decline have raised questions among investors regarding SBI’s future profitability and stock performance. While the bank’s strong financial results indicate resilience, the concerns about moderating RoE and RoA suggest potential challenges ahead. Investors are advised to monitor these developments closely and consider both the bank’s historical performance and the evolving market conditions when making investment decisions.and gross non-performing assets (NPAs) decreased to 2.07%. Net NPAs improved to 0.53% during this period. citeturn0search2
SBI Market Reaction and Investor Considerations
The downgrade and subsequent share price decline have raised questions among investors regarding SBI’s future profitability and stock performance. While the bank’s strong financial results indicate resilience,The downgrade and subsequent share price decline have raised questions among investors regarding SBI’s future profitability and stock performance. While the bank’s strong financial results indicate resilience, the concerns about moderating RoE and RoA suggest potential challenges ahead. Investors are advised to monitor these developments closely and consider both the bank’s historical performance and the evolving market conditions when making investment decisions.
In summary, while SBI continues to demonstrate strong financial performance, the recent downgrade by InCred Equities highlights concerns about the sustainability of its return ratios. Investors should remain vigilant and assess the bank’s strategic responses to these challenges in the coming periods. the concerns about moderating RoE and RoA suggest potential challenges ahead. Investors are advised to monitor these developments closely and consider both the bank’s historical performance and the evolving market conditions when making investment decisions.
In summary, while SBI continues to demonstrate strong financial performance, the recent downgrade by InCred Equities highlights concerns about the sustainability of its return ratios. Investors should remain vigilant and assess the bank’s strategic responses to these challenges in the coming periods.
