SBI Share Price Target: State Bank of India (SBI), the country’s largest public sector bank, has announced its results for the second quarter of the financial year 2027 (Q2 FY27). After the announcement of the results, the bank shares saw some pressure in the market on Tuesday. The stock closed down 1.7% at Rs 970.25. But there is no need to worry about this laziness of a day. If we look at the full-year 2026 accounts, when the benchmark Nifty 50 fell by a whopping 8.9%, SBI’s shares went down just 1.5%. This is the reason why after strong quarterly results, major brokerage houses around the world are bullish on this stock. Six major foreign brokerages have invested Rs. 1,100 to Rs. A target of up to 1,325 has been given.
Better-than-expected earnings, but supported by consolidated profits
The bank’s earnings in the July-September quarter have exceeded market estimates. In the CNBC-TV18 poll Rs. 22,859 crore profit, but actual net profit rose 14.3% year-on-year to Rs. 23,038 crores. Principal Income from Interest (NII) also increased by 14.7% to Rs. 49,143 crores. At the same time, domestic net interest margin (NIM) improved by 11 basis points to 3.11% over the previous quarter. However, ‘exceptional leverage’ i.e. consolidated earnings also played a major role in this huge profit. The extraordinary profit of the bank in this quarter was Rs. 7,289 crore, compared to Rs. 4,593 crore than Rs. 2,696 crore is more.
Debt health improved, balance sheet strengthened
The bank has achieved great success in reducing its non-performing loans (NPAs). Gross NPA has come down to 1.39% from 1.47% in the last quarter. Simply put, every Rs. 100 loan, the outstanding amount is now Rs. 1.47 to just Rs. 1.39 has been done. Similarly, the net NPA ratio has also come down from 0.38% to 0.36%. Apart from this, the bank’s domestic loans grew by 17% year-on-year, while deposits grew by 12%.
CLSA is the kindest, aiming from Citi to HSBC
Brokerage firms are most upbeat following the CLSA results. It has an ‘outperform’ rating of Rs. 1,325 has given the highest target, which is Tuesday’s Rs. 37% upside from the closing price of 970.25. According to CLSA, NII was 2% better than estimates, but profit before tax (PBT) was 3% behind estimates due to lower fee earnings and treasury losses.
On the other hand, Citi maintained ‘Buy’ rating at Rs. 1,300 (34% upside) target is given. Citi said 49% of the bank’s loans are linked to external benchmarks, which will support margins in a rising interest rate environment. Also, the impact of the shift to ECL (Expected Credit Loss) norms is Rs. 19,500 crore, which equates to every Rs. 100 at just Rs. 3.3 will affect.
At the same time, HSBC maintained a ‘buy’ rating but cut the target to Rs. 1,220 (25.7% upside). However, due to strong margins, it has raised its earnings per share (EPS) estimate for FY27 to FY29 by 4 to 8%. Macquarie with ‘outperform’ rating at Rs. A target of 1,220 has also been given. According to him, the stock’s valuation of 1.3 times FY28 price-to-book value is perfect.
Where is the problem regarding real earnings?
While most experts are bullish, Bernstein and Nomura have raised questions about the internal structure of profits. Bernstein with a ‘market perform’ rating of Rs. 1,300 (34% upside), but made a very surprising statement. Profits were supported by lower credit costs and stake sales, it said. Internal operating profit decreased due to increased expenses and decrease in other income. If these one-time earnings are removed, earnings per share (EPS) grew by just 5% instead of 14.3% annually.
Similarly, Nomura paid Rs. Maintained ‘Neutral’ rating with lowest target at 1,100 (13.4% upside). It also believes that rising costs have put pressure on operating earnings. Despite all these concerns, SBI management’s confidence remains intact. The bank maintains a credit growth forecast of 14-15% and a net interest margin above 3% for the entire fiscal 2027.
