Shares of State Bank of India (SBI) Ltd. are under pressure once again on Monday, with the stock currently trading with cuts of more than 3% compared to Friday's closing price of Rs 1,019.
SBI had emerged as the biggest Nifty loser on Friday, closing the day with a drawdown of almost 6%. In fact, since Wednesday's close, the stock has fallen more than 10%.
Much of the pressure in SBI shares comes on the back of the lender's sub-par performance in the fourth quarter, where NII failed to meet expectations while margins compressed.
There were some positives, including the stable asset quality, which remains in two-decadal low levels. And despite the relatively modest growth numbers, brokerages and analysts have largely appeared bullish on SBI.
Should you buy SBI?
Speaking to NDTV Profit, Vice President, Equity Technical Research and Wealth Management, Motilal Oswal, believes investors should avoid bottom-fishing.
"The near term trend for the stocks seems sideways and the stock has not participated in the recent upmove in markets. The stock has resistance around Rs. 1120 while immediate support is placed around Rs. 975. Considering the recent relative underperformance traders should avoid bottom fishing and wait for any trend reversal signs," he said.
Ambareesh Baliga, an independent market analyst, who looks at the fundamental side of things, has advised investors to wait it out before buying not just SBI but PSU stocks as a whole.
Most brokerages, meanwhile, have given SBI a positive rating even after the Q4 earnings.
Macquarie on SBI
- Maintains Outperform with target price of Rs 1150
- PAT missed estimates
- Weak margins spooks confidence
- Earnings miss driven by weak margins and trading losses
- NIM impacted by higher proportion of floating book
- FY27 NIM guidance ~3% with expectation of yield stabilisation and better CASA mix
- FY27 loan growth guidance maintained at 13–15%
- Asset quality remains a bright spot
HSBC on SBI
- Maintain Buy; Hike TP to Rs 1170 from Rs 1120
- Margins a must for re-rating
- Q4 results saw a sharp QoQ decline in NIM/NII
- Performance on core fees / opex / asset quality was robust
- Cut EPS by 0.4-1.7% for FY27/28 to reflect the NIM pressure, offset by stronger fee and controlled expenses
CLSA on SBI
- Maintain Outperform with TP of Rs 1275
- NIM spoils the party
- Good performance on everything except NIM
- Strong and balanced loan growth performance
- Big miss on NIM; asset quality steady
- Temporary setback, but medium-term story unchanged
J.P. Morgan on State Bank of India
Maintains OVERWEIGHT | TP Rs. 1,225 (cut from Rs. 1,260)
- 4QFY26 results reflects strong advances growth and stable asset quality
- Domestic NIM fell due to lower yields from repo‑linked loans
- PAT aided by domestic NII and controlled opex but cost/income ratio declined.
- Asset quality remained stable, Credit costs helped offset margin pressure.
- Management guided for FY27 domestic NIM of ~3%
- Margins to be supported by loan repricing, RAM yield and low deposit costs.
Citi on SBI
- Maintained Buy Target price retained at Rs1,230
- NIM contracted due to EBLR/MCLR repricing and higher floating rate loan mix
- cost of deposits eased only slightly to 5.04% vs 5.07%
- GNPA improved to 1.49% vs 1.82% FY25 driven by aggressive write-offs
- Management sees no asset quality concerns and maintains 50bps credit cost guidance
- Earnings estimates cut by 3–4% for FY27E/FY28E due to NIM pressure
Jefferies on SBI
- Buy rating maintained; Target price at Rs1,300 unchanged
- Weak Q4 is a temporary blip and outlook remains intact
- NIM missed estimates due to lower yields on corporate lending
- expects NIMs have bottomed and can stabilize in FY27
- Loan growth expected to sustain at 13–14% aiding topline
- Stock remains among top picks
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