SBI rallies ahead of Q2 results; up 5% this week

NEW DELHI: State Bank of India bounced back from its day’s low on Thursday and was trading over 2 per cent higher ahead of its results in a weak market. The results are due tomorrow.

State Bank of India, the country’s biggest lender, will be announcing its results for the July-September quarter (Q2) on Friday.

According to ET Now poll estimates, the bank’s net profit is likely to surge 25 per cent to Rs 3,514 crore for the quarter as compared to a net profit of Rs 2,810.4 crore in the corresponding quarter last fiscal.

At 02:00 pm, State Bank was trading 2 per cent higher at Rs 2260. It has hit a low of Rs 2181.25 and a high of Rs 2263.30 in trade today.

The stock has moved over 5 per cent in trade ahead of its quarterly results in the week starting November 5. The company’s stock has not been able to earn returns to shareholders in 2012 so far. The stock has gained nearly 40 per cent so far in the year.

According to analysts, the fee growth is likely to be muted while provisions are likely to remain high. Slippages may remain high but decline QoQ. Restructuring is to remain high and increase QoQ.

State Bank of India has been the market leader with a market share of 18 per cent, reports an ICICI Direct Research note. The public sector bank has also led the rate cuts and is offering one of the lowest lending rates across the industry.

Aashish Agarwal, Banking Financial Analyst, CLSA India, expects 20 per cent growth in SBI for the second quarter and NPL formation to moderate quite significantly.

“We have been negative on the public sector banks for quite some time and State Bank of India is the only exception to that,” he added.

Agarwal is of the view that SBI is at the end of their NPL cycle while other PSU banks are pretty much in the thick and thin of the NPL cycle.