SBI shares may outperform Nifty Bank says JM, check target price

Domestic brokerage firms continue to remain positive on State Bank of India (SBI) based on its sound technical parameters. The latest report from JM Financial suggests that SBI may outperform Nifty Bank in the coming days even as India's largest lender underperformed the banking gauge in 2025 so far. The Nifty Bank index scaled a new 52-week high at 55,961.20 on Tuesday.

The stock has witnessed a breakout of the neck-line of an inverse head and shoulder pattern, a bullish formation, on the back of higher than average traded volumes and delivery volumes. The potential target of the technical breakout pattern is Rs 890-900 levels, said the report from Neeraj Agarwal, Technical & Alternative Research Analyst at JM Financial. Stop loss is at Rs 775.

"Cumulative futures open interest in the current series has increased by a marginal 3 per cent. With the breakout being observed, we believe a round of long accumulation in the futures segment cannot be ruled out. It has a favourable price seasonality in the month of May. In the last 10 years, SBI has closed in the green on 7 occasions with an average return of 3.4 per cent," he said.

Calendar year to date, the stock has underperformed the Bank Nifty by 6 per cent. The ratio of SBI over Nifty Bank is trading close to the support zone. In the last 1 year, the ratio has found support in the range of 0.0142 - 0.0146. On a 1-year data window, the ratio is trading at 1.3 standard deviation below the mean levels of 0.0158 and is at its 11 percentiles, the JM's report added.

Shares of SBI rose another 2.30 per cent on Tuesday to Rs 835.40, with its total market capitalization near Rs 7.50 lakh crore. The stock had settled at Rs 816.60, rising more than 5 per cent for the day. The stock has gained nearly 6 per cent in 2025 so far, while the Nifty Bank has gained nearly 10 per cent in the current calendar so far.

SBI has recently staged a strong rebound after marking its 52 week low of Rs 680 in March 2025 and once again caught up a fresh bullish momentum above its 200 days exponential moving average on daily charts. Technically, the stock has also given a fresh breakout above the neckline of the Inverted Head & Shoulder pattern visible on daily charts, said SMC Global Securities.

"With renewed momentum and rising trading volumes alongside the upward price movement suggest the next upswing is gaining strength. Therefore, one can accumulate a stock in range of 790-795 for the expected upside of Rs 875-880 levels with stop loss below Rs 745 levels," it added.