Shares of SBI were trading marginally higher on Monday even as the public sector bank reported a massive 68% increase in profits in Q3FY23.
What Happened: India's largest bank posted its Q3 results on Friday. The standalone net profit for the company grew 68% year-over-year to ₹14,205.3 crore beating market estimates of around ₹13,400 crore with quite a margin. This is also the company's highest-ever quarterly profit.
India's largest lender also saw its revenue rise by 25% YoY to ₹98,083.8 crore. The company's net interest income grew 24.05% YoY to ₹38,069 crore. The company's net interest margin also improved by 29 basis points YoY this quarter to 3.69%.
Despite the estimate-beating results, investors seem unimpressed by the numbers.
This might be a result of SBI's exposure in the Adani Group. Shares of Adani Group companies have been in a free-fall since the U.S.-based Hindenburg Research released its report.
SBI Chairman Dinesh Khara on Friday had said the bank's overall exposure to the Adani Group is at 0.88% or around ₹27,000 crore. Finance Minister Nirmala Sitharaman and the Reserve Bank of India have also sought to allay concerns related to the banks’ exposure to the Adani Group.
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However, brokerages remain optimistic and recommend buying shares of the lender. ICICI Securities and Motilal Oswal Investment Services see an over 30% upside in the stock with price targets of ₹805 and ₹725, respectively.
Price Action: SBI was up 0.28% to trade at ₹545.95 in the afternoon hours of trading on Monday.
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