Investors on Dalal Street were keenly awaiting SBI’s March 2025 quarter results. The stock had climbed 1.5% on Friday, closing at ₹800. Results came out on Saturday afternoon. While the numbers showed growth, they also exposed gaps when compared to private rivals.
How SBI Performed in Q4
SBI’s net interest margin (NIM), a key profitability metric, slipped. It stood at 3.15% for the March 2025 quarter. A year ago, it was 3.47%. In contrast, ICICI Bank reported a strong 4.41% NIM—slightly higher than last year. Kotak Mahindra Bank posted 4.97%, though it too saw a dip from 5.28%.
Loan growth at SBI remained solid. Total advances grew 12% year-on-year to ₹42.2 lakh crore. This was driven by high credit demand from SMEs and the agriculture sector. ICICI Bank’s loan book rose 13.3% to ₹13.41 lakh crore. HDFC Bank, the largest private player, grew loans by just 5.4%, hitting ₹26.4 lakh crore.
Stable Asset Quality
Asset quality remained steady across banks. SBI’s net NPA ratio improved slightly to 0.47% from 0.57% a year ago. ICICI Bank posted 0.39%, better than 0.42% last year. Kotak Mahindra Bank also saw improvement—0.31% versus 0.34% earlier.
But costs became a concern for SBI. Employee expenses jumped 10.1% year-on-year to ₹18,005 crore. As a result, net profit dropped nearly 10%, falling to ₹18,642.6 crore. Meanwhile, ICICI Bank grew net profit by 18% to ₹12,629.6 crore. HDFC Bank posted 6.7% growth, bringing net profit to ₹17,616.1 crore.
In terms of returns, SBI lagged. Return on assets (annualized) was 1.12%. ICICI Bank clocked 2.52%. HDFC Bank stood at 1.94%.
Looking Ahead
The Reserve Bank of India has been easing liquidity. A 25 bps repo rate cut brought the benchmark rate down to 6%. This is expected to boost credit demand and economic growth.
But investors remain cautious. Global risks—especially the ongoing tariff war under the Trump administration—pose uncertainties. How Indian banks navigate this remains to be seen.
SBI also received approval to raise ₹25,000 crore in FY26. This could be through QIP or a follow-on public offer. The focus now shifts to how SBI improves its core performance metrics and catches up with private banks.
The bank ends FY25 with over 22,900 branches. These will be key for mobilizing low-cost deposits and driving loan growth.
Investor Sentiment
SBI currently trades at a P/E of 9.5 times estimated FY26 earnings. In comparison, ICICI Bank trades at a richer 19 times.
While SBI’s valuation looks attractive, investors might prefer to wait for a more favorable entry point. Long-term potential exists—but short-term execution will be critical.
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