4 November 2026 Punjab Khabarnama Bureau : Shares of State Bank of India (SBI) are in focus after the country’s largest public sector lender reported its second-quarter results for the financial year 2026-27. Brokerages have largely maintained positive views on the stock, citing improving net interest margins, healthy loan growth and better asset quality. However, analysts have also highlighted concerns over exceptional gains and weaker underlying operating performance.
SBI reported a 14.3% year-on-year increase in standalone net profit to ₹23,038 crore for the July-September quarter. The results were supported partly by a significant one-time gain from the sale of a stake in its mutual fund subsidiary. The bank’s net interest income also exceeded market estimates.
SBI Q2 Results: Profit Rises 14.3%
SBI’s net profit increased to ₹23,038 crore in Q2 FY27, compared with ₹20,160 crore in the corresponding quarter last year. Net interest income (NII), which represents the difference between interest earned and interest paid, rose 14.7% year-on-year to ₹49,143 crore.
The bank’s domestic net interest margin (NIM) improved by 11 basis points sequentially to 3.11%, reflecting better margin performance during the quarter.
Asset quality also showed improvement. Gross non-performing assets (GNPA) declined to 1.39% from 1.47% in the previous quarter, while net non-performing assets (NNPA) eased to 0.36% from 0.38%.
The improvement in margins and asset quality has supported the positive assessment of several brokerages.
CLSA Maintains Outperform Rating
CLSA maintained its Outperform rating on SBI shares and set a target price of ₹1,325 per share. The brokerage said the bank’s net interest income was around 2% above estimates, supported by margin expansion.
It also highlighted broad-based domestic loan growth of 17% year-on-year and deposit growth of 12%. However, lower fee income and treasury losses affected the bank’s profit before tax, which came in below expectations.
CLSA’s target price reflects its assessment of SBI’s earnings and business prospects, although actual stock performance will depend on market conditions and the bank’s future results.
Citi Retains Buy Rating With ₹1,300 Target
Citi retained its Buy rating on SBI with a target price of ₹1,300 per share. The brokerage cited stronger margins and healthy asset quality as key positives.
It also pointed out that nearly 49% of SBI’s loans are linked to external benchmarks. This could support lending yields and margins in a rising-interest-rate environment, as benchmark-linked loans are repriced more quickly.
Citi also highlighted the potential impact of the transition to the expected credit loss (ECL) provisioning framework, estimating the impact at around ₹19,500 crore, equivalent to approximately 3.3% of the bank’s net worth.
HSBC and Macquarie Also Positive
HSBC maintained its Buy rating on SBI but reduced its target price to ₹1,220. The brokerage factored in slower loan growth and lower valuation multiples for some of the bank’s subsidiaries.
Despite the revised target, HSBC raised its FY27-29 earnings-per-share estimates by 4-8%, citing stronger margin momentum and operating leverage.
Macquarie retained its Outperform rating with a target price of ₹1,220. It highlighted resilient margins, healthy asset quality and manageable costs associated with the ECL transition. The brokerage also described SBI’s valuation as comfortable at around 1.3 times its FY28 price-to-book value.
Bernstein and Nomura Highlight Risks
Not all brokerages shared the same level of optimism. Bernstein maintained a Market Perform rating with a target price of ₹1,300, pointing out that the headline profit growth was supported by lower credit costs and exceptional gains.
The brokerage noted that underlying pre-provision operating profit declined year-on-year because of weaker other income and higher expenses. Excluding one-time gains, earnings per share grew by only around 5%.
Nomura retained its Neutral rating with a target price of ₹1,100. It said SBI’s core performance was broadly in line with expectations, but higher operating expenses and lower other income weighed on operating earnings.
One-Time Gain Raises Questions About Profit Sustainability
One of the key factors behind SBI’s reported profit was an exceptional gain of approximately ₹7,289 crore from the sale of a stake in SBI Funds Management.
The gain boosted the bank’s bottom line, but analysts are assessing how much of the reported growth came from its regular banking operations. The distinction is important because recurring income from lending, deposits and other banking services provides a clearer picture of long-term profitability.
Investors will therefore monitor whether SBI can sustain its margin improvement, loan growth and asset-quality performance in the coming quarters.
What SBI Management Expects Ahead
SBI management has maintained its FY27 credit growth guidance at 14-15% and expects net interest margins to remain above 3%.
The bank’s ability to maintain deposit growth, control funding costs and manage operating expenses will remain important for its future earnings performance.
Overall, brokerages have largely retained positive ratings on SBI following its Q2 results, with target prices ranging from ₹1,100 to ₹1,325 among the analysts cited. However, differences in their assessments underline the importance of monitoring core earnings, one-time gains and future margin trends.