State Bank of India reports strong financial results for Q1 2024, with improvements in key areas

State Bank of India, one of the largest public banks in India, has recently announced its financial results for the quarter ending March 2024. The company has shown a positive performance with a score of 12, a significant improvement from the previous score of 2 in the last three months.

The bank's gross non-performing assets (NPA) have decreased to 2.24%, the lowest in the last five quarters. This shows that the proportion of stressed loans given by the bank is decreasing. Additionally, the interest earned in the quarter was the highest at Rs 111,042.63 crore, with a consistent growth in the last five quarters. This indicates a positive trend in the bank's sales.

The net interest income for the quarter was also the highest in the last five quarters at Rs 41,655.19 crore, showing an increase in the bank's income from its core business. The profit before tax (PBT) has also grown by 33.01% year on year, with a positive trend in the near term. The profit after tax (PAT) for the quarter was the highest at Rs 20,698.35 crore, with a growth of 24.0% year on year. This shows a positive trend in the bank's profitability.

The earnings per share (EPS) for the quarter was also the highest in the last five quarters at Rs 23.19, indicating that the company has created higher earnings for its shareholders. The net NPA has also decreased to 0.57%, showing a decrease in the proportion of stressed loans given by the bank.

However, the non-operating income for the quarter was 64.00% of the PBT, which may not be a sustainable business model. The company's cash and cash equivalents have also decreased to Rs 211,029.32 crore in the last six half-yearly periods, indicating a deterioration in short-term liquidity. Additionally, the non-operating income for the quarter was the highest in the last five quarters at Rs 17,369.25 crore, which may not be sustainable in the long run.

Overall, State Bank of India has shown a positive financial performance in the quarter ending March 2024, with improvements in key areas such as gross NPA, interest earned, net interest income, and profit after tax. However, the company needs to address its non-operating income and cash and cash equivalents to ensure sustainable growth in the future. Based on these financials, MarketsMOJO has given a 'Buy' call for the stock of State Bank of India.