SBI Q3 earnings stronger than private banks for 3rd quarter; price targets raised

State Bank of India Ltd (SBI) core earnings in the December quarter came in stronger than private banks for the third consecutive quarter. Its net interest margin (NIM), analysts said, was stable while loan growth was higher than the sector's. A couple of brokerages have raised their target prices on the PSU bank post its Q3 results.

SBI has revised its FY26 loan growth guidance to 13-15 per cent from 12-14 per cent. It sees NIM above 3 per cent in Q4. "We view SBI’s performance in Q3FY26 as the best among large banks. We revise target to Rs 1,250/1.8 times FY27E from Rs 1,150/1.5 times. We reiterate SBI as our Top Buy," said Nuvama Institutional Equities.

MOFSL said SBI's Q3 results were an all-round performance, led by robust business growth, margin expansion and healthy asset quality. It said SBI's profit growth was driven by fee-based income.

"Asset quality improved further, with slippages moderating and credit cost staying benign at 29bp. The bank sounded confident about the overall credit environment. We increase our earnings estimates by 3 per cent/4.3 per cent for FY27/28 and estimate FY27 RoA/RoE at 1.1 per cent/15.9 per cent. Reiterate Buy with a revised target of Rs 1,300," MOFSL said.

Nirmal Bang Institutional Equities said it is positive on SBI for the long term considering the bank’s leadership position in corporate and retail, ample liquidity on balance sheet, and pristine asset quality. Adding subsidiary value per share of Rs 238.50, it revised its target price on the SBI stock to Rs 1,291 against Rs 1,216 earlier.