SBI Q3 results preview: Profit set to double on Essar resolution; slippages may surge

NEW DELHI: Dalal Street analysts expect a sharp rise in State Bank of India’s December quarter profit, thanks to the proceeds of around Rs 12,000 from the resolution of Essar Steel case. However, slippages are also expected to rise during the quarter.

SBI may report up to 96 per cent year-on-year (YoY) growth in profit. Net interest income (NII) may grow in double digits, said analysts.

“Profitability will be supported by writebacks on account of Essar steel. That said, part of that will be offset by higher divergence (Rs 4,600 crore was left to be provided) and provisions on DHFL account,” said Edelweiss Securities in a note.


The broker pegs Q3 profit at Rs 5,577 crore.

Kotak Institutional Equities expects a volatile performance due to large recoveries (Essar, JP Power, Ruchi Soya, Rattan India Power) as the accounting treatment is likely to be different for each recovery.

The broking house said the loan growth will be subdued at 6 per cent YoY and core net interest margin would be unchanged at 2.9 per cent QoQ. Kotak pencils in NII at Rs 26,999.6 crore, up 19 per cent and profit at Rs 7,740.4, up 95.7 per cent.

Slippages are expected to be high. ICICIDirect puts the number at Rs 18,000 crore, as it will include HFC exposure of around Rs 10,000 crore. Edelweiss said that slippages will be at 2.7 per cent of loans.

“Loan and deposit growth may be at 6 per cent and 7.9 per cent YoY, respectively. NII growth is seen at 13.3 per cent at Rs 25,700 crore and PAT is expected to surge to Rs 7,963 crore,” ICICIdirect said in a note.

Management commentary on anticipated second wave of stress will be watched out for, given SBI's dominant exposure in some.