Shares of State Bank of India were volatile in early trade on Monday after the company posted its earnings for the quarter ended June.

What Happened: The public lender booked a standalone profit of ₹16,884.3 crore, up 178% from the ₹6,068.1 crore profit it reported in the June quarter of 2022. The lender’s net interest income – the difference between the income a bank makes from its lending activities and the interest it pays to depositors – stood at ₹38,904 crore, up 24% from the year-ago period. The company’s net interest margin however went down 37 basis points on a quarter-over-quarter basis to 3.47%.

The gross non-performing assets (NPA) ratio was at 2.76% down by 115 bps year-over-year. Net NPA ratio at 0.71% down by 29 bps YoY.

Analysts Reactions: Nomura maintained its ‘buy’ rating for the stock with a target price of ₹655. The brokerage firm said that the bank showed healthy growth in the retail segment with good asset quality.

JP Morgan also maintained its ‘overweight’ rating on the stock with a price target of ₹720. The firm noted that the bank’s profit came in 12% ahead of estimates. Talking about the decline in NIM the firm said that it was due to the deposit repricing and will be an overhang going forward.

Macquarie also maintained its ‘outperform’ call on the stock with a target price of ₹720. The firm also said that the company’s profits beat estimates. The firm noted that while the NIM declined this quarter, the bank’s management is targeting higher margins in FY24-FY25.

Jefferies also maintained its ‘buy’ rating on the stock with a price target of ₹760, indicating an over 30% upside from the stock’s last closing price of ₹573.30. Morgan Stanley, on the other hand, maintained its ‘equalweight’ rating on the stock downgrading the price target to ₹670 from ₹715.

Price Action: SBI share price was down 0.38% to trade at ₹571.10 shortly after the markets opened on Monday.

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