New Delhi, May 5, 2025 – State Bank of India (SBI), India’s largest public sector lender, has reported a 9.93% year-on-year (YoY) decline in net profit for the quarter ended FY25. The bank’s net profit dropped to Rs 18,643 crore from Rs 20,698 crore in the same quarter last year. This development has triggered a fall in SBI’s share price, raising an important question for investors: Should you buy, sell, or hold SBI shares?
SBI Q4 FY25 Financial Performance Overview
Despite the decline in net profit, SBI's financial performance shows some resilience in key areas:
-
Net Interest Income (NII): Increased by 2.69% YoY to Rs 42,775 crore
-
Net Interest Margin (NIM): Declined by 32 basis points YoY to 3.15%
-
Operating Profit: Rose by 8.83% to Rs 31,286 crore
-
Asset Quality:
-
Gross NPA ratio: Improved by 42 basis points YoY to 1.82%
-
Net NPA ratio: Declined by 10 basis points to 0.47%
-
These figures reflect stable core operations and improving asset quality, even as profitability came under pressure.
Reason Behind the Profit Decline
The key driver behind the profit drop is a significant increase in provisions:
-
Total provisions surged to Rs 6,442 crore, up from Rs 1,608 crore in the same quarter last year.
-
Provisions for bad loans also jumped 20.35% YoY to Rs 3,964 crore.
These elevated provisioning levels have weighed heavily on SBI’s bottom line despite its positive operating metrics.
Expert View
“SBI's strong performance, improving asset quality, and growing advances make it an attractive option. The bank’s diversified business model and government support provide a solid foundation for long-term investors,”
— Seema Srivastava, Senior Research Analyst, SMC Global Securities.
Srivastava emphasized that SBI's fundamentals remain intact and that the current dip may present an opportunity for investors with a long-term perspective.
Conclusion: Buy, Sell or Hold?
The decision to buy or sell SBI shares depends on your investment objectives and risk appetite. While the recent dip in net profit and share price may seem alarming, SBI's overall financial strength, stable asset quality, and long-term growth potential suggest cautious optimism.
Investors are advised to consult a qualified financial advisor before making investment decisions.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Investing in the stock market involves risk, and past performance is not indicative of future results. Always consult a licensed financial advisor before making any investment decisions. Jobaaj and the author are not liable for any losses arising from decisions based on this report.
