SBI share price gains after Q2 results beat estimates; Should you buy, sell or hold the stock?

livemint.com:

₹apiece on the BSE. India’s largest commercial bank, SBI reported an 8% year-on-year jump in its net profit for the second quarter of FY24 at ₹14,330 crore from ₹13,264.5 crore in the corresponding quarter of last fiscal. SBI’s net interest income (NII) in Q2FY24 rose 12.3% to ₹39,500 crore from ₹35,183.4 crore in the year-ago quarter.

However, SBI’s domestic net interest margin (NIM) during the July-September 2023 quarter decreased by 12 bps YoY to 3.43%. Read here: SBI Q2 Results Highlights: Net profit up 8% at ₹14,330 crore; NII grows 12.3% YoY; beats estimates The bank’s asset quality improved, while credit growth was strong at 12.39% YoY. Analysts remain bullish on SBI after it reported another strong quarter with strong asset quality and healthy NIMs as they believe the bank is well positioned to sustain the growth momentum.

Here’s what brokerages said on SBI Q2 results and SBI shares: SBI delivered a steady quarter, with a beat on profitability aided by lower provisions and steady revenue growth. Opex was high due to high wage provisions, effective November 2022, hurting PPoP growth. Margins declined 4 bps QoQ and the management expects a further 3-5 bps compression, though the bank has levers in place (CD ratio, MCLR repricing) to maintain stable margins, Motilal Oswal Financial Services said.

The brokerage firm estimates SBI to deliver FY25E RoA and RoE of 1.1% and 18.3%. It reiterated its ‘Buy’ rating on the stock with an unchanged target price of ₹700 per share. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) SBI announced a healthy performance with in-line PAT that grew 8% YoY/fell 15% QoQ.