SBI Shares Take the Plunge: Dive 2% After Consol Profit Pool Dries Up 8%

Shares of State Bank of India tanked as much as 2% as the lender reported an over 8% on-year fall in its consolidated net profit for the March quarter. This was despite the bank’s interest income rose 8% from the year-ago quarter.

A whooping rise in the lender’s provisions and contingencies, along with an increased staff costs, offset the rise in interest income during the quarter under review.  On standalone basis, the company’s net profit saw a 10% on-year fall.

The lender said its board has approved a fundraising opportunity of up to Rs 25,000 crores, in one or more tranches in FY26 through a Qualified Institutions Placement or Follow-on Public Offer or any other permitted mode or a combination. The board of directors had also announced a dividend of Rs 15.90 per share. 

The bank’s net interest income, or the difference between interest earned on loans and paid on deposits, increased 2.7%. The net NPA ratio was 0.47% for the March quarter, about 10 bps lower from the year ago quarter. Its Provision Coverage Ratio also contracted 60 bps to 74.42% in Q4.

For FY25, the bank’s standalone net profit rose 16% on year. "Though the Indian economy is less impacted by tariffs, the uncertainty over tariffs will impact the economy and investment scenario," SBI Chairman CS Setty said.

The lender’s Management expects its net interest margin to remain under pressure due to the interest rate cuts, but some levers such as an increase in CD ratio, a higher MCLR-linked book, and yield benefits from the recent increase in MCLR rates could help offsetting the impact due to the former up to some extent, Motilal Oswal said in a report.

The brokerage has cut its earnings estimate for the bank by 4.6% for FY26 and 5.% for FY27 due to NIM and provisioning pressures. However, it has maintained its ‘buy’ rating with and cut the target price on the stock to RS 915.