State Bank Of India Q4 Results Review: Brokerages Bullish On Core Strength, Attractive Valuations

Brokerage firms Citi and Investec remain bullish on State Bank of India, following its final quarter earnings, highlighting the bank's resilient core performance, strong return metrics, and attractive valuations. Both have retained their 'buy' calls on the stock with revised target prices.

Citi has a base case target price of Rs 920, indicating a potential 15% upside. It noted an 8% year-on-year growth in core pre-provision operating profit and a 3% rise in net interest income.

Net interest margin came in at 3.3%, and the bank reported a credit cost of 22 basis points for the quarter, despite slippages rising to Rs 9,800 crore, primarily due to stress in the agri and SME segments, as per the note.

Citi also pointed out that SBI trades at just 1 times the fiscal 2026 valuation, with a return on equity of 16%, making it attractively valued in its view. The brokerage laid out a bull case target of Rs 1,060, assuming 14% loan compound annual growth rate, 16% return on equity, and 1.2 times the current fiscal's book value. It sees upside risk from continued improvement in RoEs and stronger earnings momentum.

Investec, too, maintained its 'buy' rating with a target price of Rs 950, seeing a potential 19% upside. SBI's final quarter was "resilient" despite some weakness in non-interest income and treasury performance, the brokerage said.

The firm emphasised the 8% growth in core pre-provision operating profit and steady net interest margins at 3.27%, despite rising cost of funds. Loan growth stood strong at 18% yearly, while deposit growth was at 9%, with CASA ratio stable at 41%.