State Bank of India (SBI) shares tumble 4% as Q4 NIM falls; here’s what analysts said

SBI share price: Shares of State Bank of India (SBI) tumbled as much as 4.35% to touch a three-month low of ₹975 per unit on the National Stock Exchange (NSE) on Monday, May 11, as its earnings for the March quarter of the 2025-26 financial year (Q4 FY26) failed to impress investors.

At around 12:20 PM, the stock was trading 4% lower at ₹978.50 per equity share.

The scrip has fallen more than 8% in the past week and over the month. On a year-to-date basis, it has declined 1%.

While the share hit a 52-week high of ₹1,234.70 apiece on February 26, 2026, it touched a year’s low of ₹755.50 on May 9, 2025.

SBI Q4 results

The country’s largest lender posted a 5.58% year-on-year (YoY) increase in its profit after tax (PAT) to ₹19,684 crore during the quarter under review, compared to ₹18,643 crore in the fourth quarter of the 2024-25 fiscal year (Q4 FY25).

Its net interest income (NII) advanced 4.13% YoY to ₹44,380 crore in Q4 FY26, as against ₹42,618 crore in the same period of the previous financial year, according to a regulatory filing dated May 8.

However, its domestic net interest margin (NIM) fell by 21 basis points (bps) YoY to 2.93% for the reporting quarter, from 3.14% in the March quarter of FY25.

The bank’s asset quality improved, as its gross non-performing asset (GNPA) stood at 1.49% in the fourth quarter of FY26, marking a 33 basis point (bps) YoY decline from 1.82% in the year-ago period. Sequentially, it contracted by 8 bps quarter-on-quarter (QoQ) from 1.57% in the December quarter of FY26.

Its net non-performing assets (NNPA) improved to 0.39%, down by 8 bps YoY from 0.47%. However, it stayed flat sequentially.

Dividend

SBI’s board of directors also declared a dividend of ₹17.35 per equity share with a face value of ₹1 each fully paid up, i.e., 1,735% for the year ended March 31, 2026.

Furthermore, the bank fixed Saturday, May 16, as the record date and Thursday, June 4, 2026, as the dividend payment date.

What analysts said

Analysts at JP Morgan said that SBI reported a weaker-than-expected Q4 result, with NII coming 6% below their estimates. Furthermore, while the streets projected flattish to marginally lower sequential domestic NIM, the Bank recorded an 18 bps QoQ decline. However, SBI remained confident of NIM recovery in FY27.

Its asset quality was benign with credit costs at 24 bps, the analysts stated, adding that its slippages edged up slightly on seasonality.

In a note, analysts at Morgan Stanley stated that the focus of the Bank’s investor call was on the sharp NIM decline, with SBI’s management expecting some recovery from the Q4 levels driven by loan yield recovery. While the Bank assumed some recovery, it cut its NIM forecast for FY26-28 by 20 bps. Furthermore, it trimmed its earnings per share (EPS) forecast by 4% and 2% for FY27 and FY28, respectively.

The management gave 13-15% loan growth guidance for FY27, on the back of the assumption that there won’t be any material macro deterioration.

Analysts at CLSA noted that apart from the sharper-than-expected NIM compression, it was a good quarter for SBI. Its profit before tax (PBT) beat expectations, supported by lower-than-expected opex and credit costs, and a higher recovery from written-off accounts. Its loan growth was “best in class”, and its deposit growth picked up. The Bank’s Current Account and Savings Account (CASA) ratio, along with its slippages, were steady.

However, on the top line, it was a weak quarter, with NII missing estimates by 5%. Its calculated loan yields dropped due to repo rate cuts, marginal cost of funds-based lending rate (MCLR) re-pricing, and an increase in external benchmark lending rate (EBLR) share.

Macquarie analysts said that SBI’s earnings missed due to weak margins and trading losses. While the Bank’s NIM was impacted by a higher proportion of floating book, its asset quality remained a bright spot.

According to analysts at Bernstein, SBI delivered mixed results for the latest March quarter, with its NIM witnessing the steepest compression among large banks. Its return on assets (RoA) moderated sequentially, weighed down by a fall in NIM and a treasury mark-to-market (MTM) loss.

The management retained its FY27 guidance of 13-15% credit growth, more than 3% domestic NIM, and 50 bps credit cost.

SBI has a total market capitalisation of ₹9.03 lakh crore as of May 11, 2026, according to data on the NSE.

Disclaimer: This article is purely for informational purposes and should not be considered investment advice from Upstox. Please consult with a financial advisor before making any investment decisions.