SBI Share Price: Brokerages turn bullish on PSU bank after Q2 results; see what targets indicate

SBI Share Price: Shares of State Bank of India Ltd gained 1 per cent on Thursday’s trading session after the company reported its financial results for the quarter and half-year ended September 2025. As of 12:55 am, the SBI stock was trading at Rs 961.35, up by 0.45 per cent from the previous close.

SBI, India’s largest PSU bank, reported its financial results for the second quarter this year on Tuesday. The bank reported a net profit of Rs 21,604.49 crore (consolidated), indicating a 6.9 per cent increase from Rs 20,219.62 crore year-on-year (YoY).

The bank’s net interest income (NII) rose 5.8 per cent YoY to Rs 1,28,040.50 crore from Rs 1,21,044.68 crore.

Brokerages’ views on SBI

Nomura has maintained its ‘buy’ rating on SBI, with the target price raised to Rs 1,100 from Rs 980. The upgrade followed after SBI’s strong performance in Q2 FY26, driven by healthy net interest margins (NIMs), and improved asset quality.

Nomura raised its FY26 earnings per share (EPS) estimate by 6 per cent, primarily due to one-off gains, and increased FY27–FY28 EPS forecasts by 3 to 5 per cent, supported by expectations of better margins and sustained loan growth.

The brokerage anticipates SBI will deliver a return on assets (ROA) of 1.1 per cent and a return on equity (ROE) of 16 per cent over FY27–FY28. The increase in target valuation multiple is attributed to the stronger RoE outlook, reflecting Nomura’s confidence in SBI’s continued financial strength and profitability momentum.

Morgan Stanley (MS) has maintained an ‘equal-weight EW’ rating on SBI while raising its target price to Rs 1,025 from Rs 885.

The brokerage noted the key highlight of the results was a 5 per cent beat in net interest income (NII) and a strong 25 per cent YoY growth in fee income, which together led to a 14 per cent beat on core pre-provision operating profit (PPoP).

Profit after tax (PAT), excluding exceptional gains, came in 15 per cent above Morgan Stanley’s estimates, underscoring robust operational performance.

The brokerage said the asset quality remains solid, supported by a liquidity coverage ratio (LCR) of 144 per cent, up from 139 per cent in the previous period, and an improvement in the Common Equity Tier 1 (CET1) capital ratio to 12.5 per cent.

HSBC has maintained its ‘buy’ rating on SBI and raised its target price to Rs 1,100 from Rs 960. The upgrade followed a healthy loan growth and a stronger revenue trajectory in Q2 FY26, both seen as key positives, while asset quality remained stable.

HSBC has raised its earnings per share (EPS) estimates by around 6 to 9 per cent for FY26–FY28, citing expectations of higher loan growth, improved margins, and stronger fee income. The brokerage noted that this is one of the sharpest earnings upgrades for SBI, supported by a robust core pre-provision operating profit (PPoP) trajectory, which it believes justifies higher valuation multiples.

Jefferies has maintained its ‘buy’ rating on SBI and raised its target price to Rs 1,140 from Rs 970. For Q2 FY26, SBI reported a net profit of Rs 202 billion, up 10 per cent YoY, which exceeded estimates due to better net interest margins (NIMs), robust fee income, and higher treasury gains.

The bank’s loan growth accelerated to 13 per cent YoY, while deposit growth lagged at 9 per cent, with Jefferies noting that both are expected to align by FY27 as balance sheet growth normalises.

Asset quality remained stable, enabling SBI to maintain a low credit cost of 0.5 per cent of average loans. The brokerage also highlighted potential value unlocking opportunities as the bank may consider monetising or launching IPOs for its subsidiaries, such as SBI Asset Management Company (SBI AMC) and SBI General Insurance (SBI GI).

Citi has maintained a ‘buy’ rating on SBI with a target price of Rs 1,110. The bank’s core earnings surprised positively, supported by a 7 bps expansion in net interest margin (NIM), robust 4 per cent quarter-on-quarter credit growth—driven particularly by retail, agriculture, and MSME (RAM) segments—and slippages contained below 50 bps, indicating solid asset quality.

This operational outperformance was further boosted by a Rs 38.7 billion post-tax gain from the sale of SBI’s stake in YES Bank, which lifted the return on assets (RoA) to over 1.15 per cent, comfortably absorbing an 11 per cent QoQ and 12 per cent YoY rise in operating expenses and higher credit costs (50 bps) stemming from standard asset provisioning.

Reflecting confidence in its franchise strength, management has raised its FY26 guidance to 12 to 14 per cent loan growth and NIMs above 3 per cent, while noting that the expected credit loss (ECL) framework impact should be minimal.

Citi also highlighted potential value-unlocking opportunities from the possible IPOs of SBI’s Asset Management and General Insurance subsidiaries, further enhancing long-term shareholder value.