The State Bank of India share price is trading down over 1% . The Q2 performance was supported by an exceptional gain of Rs 4,590 crore from the divestment of 13.18% of its shareholding in Yes Bank. However, some of its subsidiaries saw a decline in profitability. SBI Card profit clocked a 20% decline QoQ, while SBI Life profit was down 17% QoQ. However, most brokerages have retained a positive stance on the stock, citing resilient margins, steady credit growth, and benign asset quality.
Axis Securities, Anand Rathi Research, and Motilal Oswal have either raised their target prices or reaffirmed their Buy ratings. Here is a detailed analysis of their investment rationale.
Motilal Oswal on SBI: Asset quality improves further
Motilal Oswal reiterated a Buy with a target price of Rs 1,075 per share. This implies an upside of 13% for the SBI share price from current levels. Motilal Oswal pointed out that asset quality saw an improvement, with slippages improving and credit cost remaining benign at 39 bps. The bank has reiterated its domestic margin (NIM) guidance of over 3% and expects loan growth of 12-14%, led by growth across its business segments.
The brokerage house believes a robust credit pipeline is expected to support a healthy outlook in FY26, and credit growth was healthy at 13% YoY.
Axis Securities on SBI: Profit beat across lines, credit pipeline strong
Axis Securities reiterated its Buy rating on SBI as well, with a target price of Rs 1,135, up from Rs 1,055 earlier, implying a 19% upside from the current level. The brokerage said the September quarter was a “beat across all key metrics,” with net interest income (NII) rising to Rs 43,000 crore from Rs 41,100 crore in the June quarter.
Domestic and global net interest margins (NIMs) improved by seven basis points to 2.97% and 3.09%, respectively, driven by effective liability management and improved funding mix.
Axis Securities noted that “the outperformance on NIMs in Q2, reversing earlier than expected, provides cushion to the bank’s 1% RoA delivery,” the brokerage said. It expects return on assets (RoA) to stay above 1% and return on equity (RoE) between 14–16% over FY26–28.
Axis also pointed out that listing of SBI Mutual Fund and SBI General Insurance could unlock shareholder value in the medium-term.
Anand Rathi Research on SBI: Growth steady, fee income rising
Anand Rathi Research maintained a Buy rating on SBI with a revised target of Rs 1,104, valuing the bank at 1.3 times FY27 book value. The target price implies xx% upside from current levels. The brokerage described Q2 as “a healthy quarter in a challenging environment.”
Loans grew 3.9% quarter-on-quarter, with mortgages up 3.5% and corporate loans up 3%. Fee income climbed 25% year-on-year, supported by higher debit-card transactions and government business.
Anand Rathi expects 13% compounded annual growth in advances through FY26–FY28, supported by continued improvement in deposit mobilisation and margins near 2.9%.
“SBI’s ability to control operating costs while sustaining growth places it in a stronger position than most peers,” the brokerage said, adding that the bank’s CASA ratio of 38% remains competitive.
Brokerage views on ECL transition, digital push, and subsidiary value unlocking
Brokerages noted that the transition to expected credit loss (ECL) norms remains manageable. The bank intends to phase in the impact gradually until March 2026 and has strengthened its collection systems to mitigate potential provisions.
On technology, SBI is preparing a revamped version of its YONO app and executing Project SARAL to streamline retail-banking operations.