State Bank of India, the largest Public Sector Bank in India has announced its Quarterly Results for Q4FY21 on Friday 21st May 2021. Let’s have a brief discussion regarding the quarterly results of the bank in this blog.
Introduction:
State Bank of India has announced its Quarterly Results for Q4FY21 on Friday 21st May 2021. The largest Public Sector Bank of India has witnessed a significant last quarter with a marvelous growth in Operating Profit and Net Profit. Let’s analyze the result of the bank and its near-term outlook in brief.
Q4FY21 Results (Standalone):
- Interest Earned of the bank in the last quarter of Financial Year 2021 is Rs. 65,101 Cr. down by 2.44% QoQ from Rs. 66,734.50 Cr. in Q3FY21. Year-on-Year, interest earned by the bank has gone up by 3.86% from Rs. 62,681.40 Cr. in the last quarter of the previous financial year.
- Interest Expenditure of the bank has gone down by 4.7% YoY from Rs. 39,914 Cr. in Q4FY20 to Rs. 38,035 Cr. in Q4FY21. Quarter-on-Quarter, same has increased by 0.3%. An increase in Interest Earnings while the fall in Interest Expenditure is a positive sign for the bank.
- Operating Profit of the Bank stood at Rs. 19,700 Cr. as of 31st March 2021, up by 25.2% YoY from Rs. 15,734 Cr. in the quarter ended 31st March 2020. Operating Profit is up by 13.6% QoQ from Rs. 17,333 Cr. in Q3FY21.
- SBI has made provisions of around Rs. 11,051 Cr. in the quarter ended 31st March 2021, up by 6.85% QoQ from Rs. 10,342 Cr. in Q3FY21. Year-on-Year, Provisioning has come down by 18.1% from Rs. 13,495 Cr. in Q4FY20.
- Profit Before Tax (PBT) of the Bank stood at Rs. 8,649 Cr. in Q4FY21 up by 74% YoY and 23.7% QoQ from Rs. 4,970Cr. and Rs. 6,991 Cr. respectively.
- Bank has registered whooping growth in its Net Profit of 80% YoY from Rs. 3,581 Cr. in Q4FY20 to Rs. 6,451 Cr. in Q4FY21. Further, the QoQ growth of Net Profit of the Bank is 24.1% from Rs. 5,196 Cr. in Q3FY21.
- The Gross NPA of the bank is at 4.98% and Net NPA of the bank is at 1.50%. In comparison with these NPA numbers with Q4FY20, Gross NPA and Net NPA have come down from 6.15% and 2.23% respectively. Quarter-on-Quarter Gross and Net NPA have gone a little up.
- The capital Adequacy Ratio of the bank is on the lower side at 13.74%, as of Q4FY21.
- Net Profit of the Bank, on a full-year basis, has grown by 40.9% YoY from Rs. 14,488 Cr. in FY20 to Rs. 20,410 Cr. in FY21.
Q4FY21 Results (Consolidated):
- On a consolidated basis, SBI has earned a Net Profit (before Share of Associates) of Rs. 7,270 Cr. in the quarter ended 31st March 2021, up by 13.5% QoQ from Rs. 6,402 Cr. in Q3FY21. Year-on-Year, the Net Profit has increased by 59.5% from Rs. 4,558 Cr. in Q4FY20.
- On a full-year basis, the consolidated Net Profit (before Share of Associates) of the Bank has increased from Rs. 18,177 Cr. in FY20 to Rs. 24,280 Cr. in Q4FY21 amounting to 33.5%.
Valuation:
- Currently, SBI Stock is trading at a PE Ratio of 14.8.
- As per the historical Median PE of the Bank, SBI Stock is currently trading at a Premium Valuation of 20%-25%.
Conclusion:
SBI is currently trading at a slightly higher valuation. On the Financials side, Bank holds the strength to generate an enormous amount of profit, if Bank can manage its NPA Situations very well. As of now, the cloud of the NPA problem will be over all the banks until September 2021, and one can get a clear picture post this period only. Do invest in the financial market with proper advice from a financial advisor.
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