Shares of State Bank of India fell more than 7% on Friday after the lender's March-quarter earnings missed Street expectations, prompting selling pressure in the stock despite stable asset quality.
The stock traded at Rs 1,016 compared with Thursday's closing price of Rs 1,099 after the bank reported weaker net interest income and operating profit for the fourth quarter of FY26.
The sharp fall in the stock comes after SBI posted net interest income of Rs 44,380 crore for the March quarter, lower than analysts' estimates of around Rs 46,000 crore. The figure was also 4% lower compared with the previous quarter.
Operating profit stood at Rs 27,704 crore against market estimates of Rs 30,396 crore.
While lower provisions and operating expenses supported profitability, return on assets declined to 1.07% as growth in core lending income remained modest. Asset quality remained stable during the quarter.
'Buy The Dip'
Market expert Ashish Chaturmohta said concerns around asset quality and margin pressure had weighed on the stock, though valuations could support buying interest at lower levels.
"From a valuation perspective we are not very concerned. If you look at credit growth in PSU banks it is very strong, double-digit levels," Chaturmohta said.
"Bigger challenge SBI is facing now is the asset quality where we have seen slippages surpassing above the Rs 5,000 crore mark. This contrasts to private players who have been able to manage the NIMs," he said.
"So I think there is a asset quality concern. But as far as valuation is concerned, I believe there will be a lot buying interest in the Rs 1,000-980 range," he added.
The reaction in SBI shares reflects investor concern over near-term earnings momentum after the lender's quarterly numbers fell short of expectations.
Full-Year Record
Despite the weak March-quarter performance, SBI reported record standalone net profit for FY26.
Annual standalone net profit rose around 13% to Rs 80,032 crore from Rs 70,901 crore in FY25. The board also declared a dividend of Rs 17.35 per share.
Asset quality improved further during the year, with gross non-performing assets declining to 1.49% from 1.82% a year earlier. Net NPA remained at 0.39%.
The bank's capital adequacy ratio under Basel III stood at 15.40% at the end of March.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
