SBI shares hit record high after Q3; brokerages raise target up to ₹1,300

SBI shares hit a fresh all-time high after Q3FY26 results beat estimates. Brokerages raise earnings forecasts and target prices to ₹1,300, maintaining buy calls

State Bank of India (SBI) remains the 'top stock' for analysts as the state-owned lender's December quarter (Q3FY26) results beat Street estimates by a decent margin. Besides, SBI’s core earnings staying stronger than private banks for a third consecutive quarter has also prompted some brokerages to lift their earning estimates and share price target on the stock.

 

Those at Emkay Global Financial Services, for instance, have raised their FY26-28 earnings estimates by 2-4 per cent, while raising the target price by around 11 per cent to ₹1,225.

 

Motilal Oswal Financial Services, too, increased its earnings estimates by 3 per cent for FY27 and 4.3 per cent for FY28, estimating FY27 return on asset (RoA) and return on equity (RoE) at 1.1 per cent and 15.9 per cent, respectively. The brokerage, too, has raised its target price on the stock to ₹1,300.

 

 

Overall, 42 of the 49 analysts tracking SBI stock assigned it a 'buy' rating, as per Bloomberg data.

 

On the bourses, SBI share price jumped 6.6 per cent on the National Stock Exchange (NSE), hitting a fresh all-time high of ₹1,137 per share in the intraday trade. The stock logged its biggest single-day gain since June 2024, with around 17.31 million shares changing hands on the counter, so far in the day, worth ₹1,952 crore.

 

At 10:29 AM, the stock traded 6 per cent higher against a 0.48 per cent rise in the Nifty50 index and 3.35 per cent gain in the Nifty PSU Bank index.  READ LATEST STOCK MARKET UPDATES TODAY LIVE

SBI Q3 results

 

On Saturday, State Bank of India reported its highest-ever quarterly profit of ₹21,028 crore – rising 24.5 per cent year-on-year (Y-o-Y).

 

Its net interest income (NII) increased 9 per cent Y-o-Y to ₹45,190 crore, while reported net interest margin (NIM) expanded 2 basis points (bps) to 2.99 per cent. Adjusted for interest on tax refunds, however, core NIM fell 1bp Q-o-Q.

 

Business-wise, SBI’s loan book expanded by 15.6 per cent Y-o-Y and 6.1 per cent quarter-on-quarter (Q-o-Q) in Q3FY26, led by 7.6 per cent Q-o-Q rise in corporate loans and 11 per cent Q-o-Q in SME loans.

 

Domestic loans increased 7 per cent Q-o-Q/15 per cent Y-o-Y, while overseas grew 2 per cent Q-o-Q/13 per cent Y-o-Y.

 

The management expects the recent regulatory guidelines by the Reserve Bank of India (RBI) to open up lending opportunities in REITs and M&A financing, which will further scale up the already strong corporate funding pipeline.

 

SBI has, thus, raised the upper end of its credit growth guidance to 13-15 per cent from 12-14 per cent. It has also maintained an exit NIM guidance of around 3 per cent for FY26.

 

The deposits, meanwhile, increased by 9 per cent Y-o-Y and 2 per cent Q-o-Q.

 

"Strong and diversified growth, resilient margins despite deposit pressure, industry-leading asset quality, and large provision buffers underpin SBI’s improved earnings visibility and balance-sheet strength. Sustained RoA, at over 1 per cent, and healthy mid-teen RoE profile warrant premium valuation vs historical valuations," said analysts at JM Financial Institutional Securities.

 

They, too, maintained their 'Buy' rating while increasing their target price to ₹1,250, from ₹1,140.  ALSO READ | Tata Steel shares hit all-time high post Q3; brokerages raise target price

Best asset quality in 'multiple years'

Meanwhile, SBI's asset quality sustained improvement with gross and net slippages reducing 3bps Q-o-Q each. Gross non-performing assets (GNPA) and net NPA (NNPA) ratio also improved 15bps and 3bps Q-o-Q to 1.57 per cent and 0.39 per cent, respectively. This, analysts noted, was among SBI's best ratio in multiple years.

 

That apart, SBI continued to maintain strong buffers with provision coverage ratio (PCR) at 75.5 per cent (less 25bps Q-o-Q).

 

"SBI reported a strong all-round performance, led by robust business growth, margin expansion and healthy asset quality. The bank beat in net profit estimate in Q3FY26 is higher than the combined profits of all private banks under our coverage universe, excluding the top four large private banks. The management expects a robust credit pipeline to support a healthy outlook going forward," MOFSL said.      ==========  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.