Net interest income (NII), which reflects the difference between interest earned and interest expended, rose 4% year-on-year to Rs 44,380 crore during the quarter. SBI’s provisions fell sharply to around Rs 2,872 crore from Rs 6,442 crore in the same quarter last year. Provisions for non-performing assets also declined to Rs 3,140 crore from Rs 3,964 crore a year earlier.
Margins softened during the quarter. Domestic net interest margin stood at 2.93%, down 21 basis points YoY and 18 basis points QoQ. Whole-bank NIM for Q4 FY26 stood at 2.81%, while domestic NIM for FY26 stood at 3.03%.
SBI shares: Should you buy, sell or hold?
Bernstein maintained its “Outperform” rating on SBI with a target price of Rs 1,300, an upside of 27.5%. The brokerage said that despite margin pressure, loan growth remained strong at around 17% YoY, driven by SME, agriculture, and corporate lending. Slippages increased sequentially, though the brokerage noted that these were largely seasonal and agri-led.
Return on assets declined to 1.07% amid NIM compression and treasury mark-to-market losses. Management retained its FY27 guidance of 13-15% loan growth and domestic NIM above 3%. Bernstein also highlighted improving CET1 levels and stable asset quality despite broader macroeconomic concerns.
Citigroup maintained its “Buy” rating on SBI while lowering the target price to Rs 1,230 from Rs 1,265. The brokerage said SBI’s Q4 earnings were impacted by a sharp compression in net interest margins and weaker fee income. The foreign brokerage noted that credit costs remained under control even as slippages increased during the quarter. Management has guided for 13-15% loan growth and return on assets of over 1% for FY27. The brokerage has trimmed its FY27 and FY28 earnings estimates by 3-4% owing to lower NIM assumptions.
Morgan Stanley maintained its “Equal-weight” rating on State Bank of India while cutting the target price to Rs 980 from Rs 1,000. The brokerage said that although SBI delivered a headline earnings beat, it was overshadowed by a meaningful miss on net interest income and net interest margins. NIM excluding the IT refund declined 18 basis points quarter-on-quarter and came in 16 basis points below estimates.The Wall Street major attributed the fall in yields to a higher share of treasury bill-linked corporate loans in the overall mix. The brokerage has cut its FY27 and FY28 NIM forecasts by more than 20 basis points and also trimmed EPS estimates by 4% and 2% for FY27 and FY28, respectively. While management expects some recovery in margins going forward, Morgan Stanley said the key factor will be whether that recovery proves sustainable.
Motilal Oswal maintained its “Buy” rating on State Bank of India with a target price of Rs 1,300, implying an upside potential of 27.5%. The brokerage said SBI reported a mixed quarter, impacted by a decline in net interest income and contraction in net interest margins due to repo rate transmission, MCLR cuts, and the migration of select corporate loans from MCLR-linked rates to treasury bill-linked rates.
Despite the pressure on margins, the bank expects to maintain domestic NIM above 3% going forward, supported by corrective measures and an expected improvement in yields. Treasury profits also remained weak during the quarter amid a spike in bond yields. Motilal Oswal noted that the bank continues to guide for healthy credit growth, with loan growth expected at 13-15% in the periods ahead. Asset quality remained broadly resilient, although slippages increased slightly in the March quarter, reflecting the seasonal trend seen across PSU banks.
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