SBI shares edge higher as analysts weigh Q2 beat against opex concerns
The bank reported double-digit growth in quarterly profit and net interest income, while retaining its key business growth and profitability guidance
Shares of State Bank of India (SBI) traded higher on the National Stock Exchange (NSE) on Wednesday, edging up 0.73 percent to ₹977.30 by 1 pm, hitting an intraday peak of ₹988. Trading volume surpassed 97.92 lakh shares, amounting to ₹957 crore. Prior to the Q2FY27 earnings release, interest in the stock was evident.
Sell orders outweighed buy orders, constituting 68.68 percent of the order book. Analysts' reactions to the results ranged from positive to cautious. While several maintained a bullish outlook, targets varied. CLSA retained an Outperform rating with a target of ₹1,325, attributing the 2 percent net interest income (NII) beat to an 11-basis-point quarterly-over-quarter domestic net interest margin (NIM) expansion.
Citi maintained a Buy rating at ₹1,300, emphasizing resilient margins and solid asset quality. Axis Direct and Motilal Oswal also retained Buy ratings with targets of ₹1,275 and ₹1,225 respectively. Macquarie set an Outperform target at ₹1,220, while HSBC reiterated a Buy at ₹1,220. JM Financial reduced its target to ₹1,215 from ₹1,275 but retained a Buy rating. Kotak Institutional Equities kept a Buy rating at ₹1,250.
Not all analysts were as optimistic. UBS and Nomura maintained Neutral ratings with a ₹1,100 target, citing weaker underlying pre-provision operating profit and softer retail loan growth. Bernstein was cautious, setting a Market Perform rating at ₹1,300, noting that excluding one-offs, earnings per share (EPS) grew only 5 percent year-over-year against the reported 13 percent, with return on assets (RoA) at 0.90 percent versus the reported 1.19 percent.
Profit after tax (PAT) was ₹230.4 billion, up 14.3 percent year-over-year, driven by a ₹72.9 billion one-time gain from SBI Funds stake sale, partially offset by ₹12.8 billion in treasury losses. Net interest income (NII) grew 14.3 percent year-over-year to ₹491.4 billion. Management retained guidance of 14-15 percent loan growth, 1 percent RoA, and over 3 percent domestic NIM for FY27. The stock still trades below its 52-week high of ₹1,234.70, achieved in February.
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