SBI Share : Financial Statements Analysis

State Bank of India (SBI) demonstrates resilience in a challenging macroeconomic environment, balancing steady profitability with strategic investments in digital innovation. Below is a comprehensive analysis using the latest financial data and market insights:

Financial Statements Analysis

Revenue Growth

Q4FY25: Interest earned grew 1.88% QoQ (₹1.27 lakh crore) and 8.11% YoY14. Operating profit rose 8.45% QoQ to ₹1.31 lakh crore14.
FY25: Record net profit of ₹70,901 crore (+16.08% YoY)2, driven by loan growth and improved asset quality18.

Profitability Metrics

Net Interest Margin (NIM): Stable at 3.01% in Q4FY25, supported by 40% MCLR-linked loans3.
Net Profit Margin: 15.33% in FY25, up from 14.71% in FY2420.
Operating Margin: Improved to 10.76% YoY in Q414.

Earnings Per Share (EPS)

FY25 EPS: ₹79.44, up from ₹68.44 in FY2420.
Projected EPS growth: 2.9% annually through 20284.

Debt & Liquidity

Debt-to-Equity: Not explicitly stated, but P/B ratio of 1.49x (Book Value: ₹4.6 lakh crore)6.
Liquidity Ratios: Current ratio at 1.46 and quick ratio at 14.11 (Mar 2023), indicating adequate short-term liquidity despite declining trends13.

Cash Flow

Operating cash flow at ₹48,486 crore (0.63x net profit)20. Free cash flow remains negative due to high capital expenditures4.

Valuation Metrics

Metric	SBI	Industry Avg (Public Banks)
P/E Ratio	9.14x17	~10x
P/B Ratio	1.49x6	0.82–2.39x6
EV/EBITDA	13.25x7	N/A
Dividend Yield	2.07%2 6	1.5–3%

SBI trades at a premium to peers like Punjab National Bank (P/B: 0.84x) but lags Indian Overseas Bank (2.39x)6.

Growth Potential & Competitive Positioning

Industry Trends

Banking sector faces 6% annual revenue decline risks but benefits from digital adoption and financial inclusion412.
RBI projects 7% GDP growth in FY25, supporting credit demand8.

Competitive Advantage

Market Share: 22.55% deposit and 19.06% advance share5.
Digital Leadership: YONO platform (10M+ users) and 60 sbiINTOUCH branches9.

Innovation

Launched SBI Innovative Opportunities Fund (thematic equity fund) in 202410.
Allocated ₹6 lakh crore for corporate loan growth (14–15% CAGR)18.

Management

Chairman C.S. Setty: Focused on retail, digital, and international banking since August 20241118.

Risk Analysis

Market Risks

Geopolitical tensions and inflation impacting global markets1219.
Projected revenue decline of 6% annually4.

Operational Risks

Gross NPAs at 1.82% (Q4FY25), with provisions surging 300% YoY314.
Regulatory scrutiny on cybersecurity and AML compliance12.

Liquidity Risks

Liquidity coverage ratio (LCR) at 126%, above regulatory minimum19.

Recent Developments

Q4FY25 Results: Net profit fell 9.9% YoY to ₹18,643 crore but rose 10.4% QoQ214.
Mergers: Integrated five associate banks in 2024, expanding network to 22,500 branches15.
Dividend: ₹15.90/share declared for FY25 (2.07% yield)26.

Conclusion

SBI maintains a robust market position with stable margins and strategic digital investments. While near-term headwinds like margin compression and rising provisions persist, its strong asset quality (GNPA: 1.82%) and leadership in retail banking position it for 12–13% loan growth through FY2718. Valuation metrics suggest moderate upside potential, contingent on sustained execution in a volatile macroeconomic climate.