- State Bank of India reported a 14.3% rise in net profit to Rs 23,038 crore in Q2FY27
- Profit included a one-time gain of Rs 7,288 crore from stake sale in its asset management unit
- Net interest income grew 15% year-on-year, reaching Rs 49,143 crore, beating estimates
The country's largest lender, State Bank of India (SBI), has drawn a broadly positive assessment from brokerages after its September quarter results (Q2FY27), with analysts expecting rising interest rates, healthy loan growth and resilient asset quality to support margins and earnings over the coming quarters.
However, the sharp rise in reported profit was aided by a one-time gain from the sale of a stake in its asset management subsidiary, leaving questions over the strength of underlying profitability.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
Brokerages, including Citi, Jefferies and Kotak Neo, have retained their ‘Buy' ratings on the stock, with target prices of Rs 1,300, Rs 1,320 and Rs 1,250, respectively.
Meanwhile, Bernstein remains more cautious, maintaining a ‘Market-Perform' rating with a target price of Rs 1,300.
The bullish view rests largely on the outlook for net interest margins (NIMs), as higher interest rates and the deployment of surplus liquidity are expected to support lending yields. SBI's strong asset quality and low credit costs also remain key positives.
SBI Shares: Brokerages See NIM Recovery, Bernstein Flags Earnings Quality
Citi expects SBI to maintain its domestic NIM above 3%, supported by a high share of floating-rate loans and rising interest rates. While the bank has retained its FY27 loan growth guidance of 14-15%, Citi expects growth to exceed 16%.
READ | SBI Q2 Results: Profit Rises 14% On One-Time Gain; Asset Quality Improves
Jefferies also expects domestic NIM to remain above 3%, helped by higher interest rates and surplus liquidity deployment. It sees net interest income growing at a compound annual growth rate (CAGR) of 12% over FY27-FY29 and has raised its profit estimates for the period by 1-2%.
Kotak Neo believes higher rates will support lending margins and earnings growth through FY27. Healthy demand across retail, SME and corporate lending, coupled with low credit costs, strengthens its outlook.
Bernstein, however, cautioned that SBI's headline earnings growth masks weaker underlying profitability, with the reported number supported by one-off stake-sale gains. It also flagged slower deposit growth relative to advances, rising operating expenses and weaker other income as concerns. In its assessment, margin recovery offers only limited relief against these pressures.
SBI Q2 Results: Profit Rises 14%, But One-Time Gain Lifts Reported Earnings
SBI reported a 14.3% year-on-year increase in net profit to Rs 23,038 crore in Q2FY27, compared with Rs 20,160 crore in the corresponding quarter last year.
The reported profit included a one-time gain of Rs 7,288 crore from the sale of a 6.30% stake in SBI Funds Management through an offer for sale. Following the transaction, SBI's stake in the asset management company stood at 55.56% as of September 30, 2026.
Excluding the gain, the bank's profit stood at Rs 15,750 crore, considerably below the Street's estimate of Rs 22,619 crore.
Net interest income, the difference between interest earned and interest expended, rose 15% year-on-year to Rs 49,143 crore, beating the estimate of Rs 48,570 crore. Operating profit, however, declined 1.4% to Rs 26,937 crore from Rs 27,311 crore a year ago.
Provisions fell to Rs 4,217 crore from Rs 5,400 crore in the year-ago quarter and Rs 5,047 crore in the preceding quarter.
Asset Quality Remains Strong
SBI's asset quality improved during the quarter. Gross non-performing assets (NPAs) declined to 1.39% from 1.47% in Q1FY27, while net NPAs eased to 0.36% from 0.38%.
Both ratios were better than Street estimates of 1.45% and 0.37%, respectively. The slippage ratio stood at 0.50%, while domestic NIM came in at 3.11%.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.