SBI Shares Jump 7% After Reporting 24% YoY Net Profit Growth; Check Target by Nomura

Synopsis: SBI shares jump 7 percent after Q3 profit rises to Rs 21,028 crore, supported by higher NII, stable asset quality, and positive brokerage outlook on sustained earnings growth ahead.

The shares of this largest public sector bank, which provides a wide range of services, including retail banking, corporate banking, investment banking, mortgage loans, and wealth management are in focus after strong Q3 results.

With a market capitalization of Rs 10,52,013 crore, State Bank of India’s shares on Monday made a day high of Rs 1,140.70 per share, up by 7 percent from its previous day’s close price of Rs 1,066.40 per share. The share of this company has given a return of 190 percent over the last five years.

Results Highlights

• QoQ View: The bank reported Net interest Income grew by 5.13 percent to Rs 45,190 crore in Q3 FY26 from Rs 42,894 crore in Q2 FY26. NIM for the period stood at 2.99 percent, up by 2bps QoQ from 2.97 percent in Q2 FY26. Accompanied by a net profit growth of 4.31 percent to Rs 21,028 crore in Q3 F26 from Rs 20,160 crore in Q2 FY26, and cost to income ratio of 48.29 percent in the same period, improving by 99bps QoQ.
• YoY View: The bank reported Net interest Income growth of 9.04 percent to Rs 45,190 crore in Q3 FY26 from Rs 41,446 crore in Q3 FY25. NIM for the period stood at 2.99 percent,  down by 2bps QoQ from 3.01 percent in Q2 FY26. Accompanied by a net profit growth of 24.49 percent to Rs 21,028 crore in Q3 F26 from Rs 16,891 crore in Q2 FY26, and cost to income ratio fell to 48.29 percent in the same period, improving by 684bps YoY.

In Q3 FY26, State Bank of India reported improved asset quality YoY, where GNPA stood at 1.57 percent in Q3 FY26 from 2.07 percent in Q3 FY25, and NNPA stood at 0.39 percent in Q3 FY26 from 0.53 percent in Q3 FY25. 

The slippage ratio improved by 6 bps QoQ to 0.40 percent. Provision coverage stood at 75.54 percent, while net NPAs were Rs18,012 crore, excluding additional provisions of Rs 30,642 crore. The capital adequacy ratio of the bank was at 14 percent in Q3 FY26, improving 101 bps YoY.

Brokerage’s view

Nomura has maintained a Buy rating on State Bank of India with a target price of Rs 1,235 per share, implying an upside of around 15 percent from Monday’s opening.

The brokerage highlighted SBI’s strong all-round performance in Q3 FY26, noting superior margin delivery and loan growth versus peers. Robust net interest margins, disciplined operating expenses, and higher other income collectively drove a meaningful beat on profit after tax, reinforcing earnings visibility.

Nomura also emphasised stable and lean asset quality, which limits downside risks. The brokerage expects incremental upside to be driven primarily by earnings growth rather than valuation re-rating, supported by improving profitability metrics, operating leverage benefits, and sustained balance-sheet strength.

Bernstein has maintained a Market-Perform rating on State Bank of India with a target price of Rs 1,100, implying a modest 3 percent upside from today’s opening level, indicating limited near-term price appreciation at current valuations.

The brokerage highlights SBI’s operational strength, led by 16 percent YoY loan growth ahead of peers. Net interest margin improved by 2 bps QoQ, while domestic retail loan growth remained broad-based. However, non-interest income softened due to weaker treasury performance, even with the support from SME, retail and agriculture segments.

Asset quality trends remain supportive, with credit costs declining to 29 bps and slippages falling sharply by 57 percent YoY and 39 percent QoQ. GNPA and NNPA improved to 1.57 percent and 0.39 percent, respectively. Return ratios stayed strong, with ROA above 1 percent and ROE exceeding 20 percent, though upside is earnings-led rather than valuation-driven.

About the Company 

State Bank of India is India’s largest banking and financial services institution, with an asset base exceeding Rs 61 trillion. It serves over 50 crore customers through an extensive network of 23,085 branches, 63,580 ATMs/ADWMs, and 82,900 BC outlets, driven by innovation and strong customer-centric values. 

The bank has diversified through subsidiaries such as SBI Life, SBI General Insurance, SBI Mutual Fund, and SBI Card, and maintains a global presence with 241 offices across 29 countries.

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