State Bank of India (SBI) Share Price Target at Rs 1,300: ICICI Securities
ICICI Securities has maintained its BUY call on State Bank of India with an unchanged target price of Rs 1,300, implying about 34% upside from the current market price of Rs 970. The country's largest lender reported a July-September quarter profit of Rs 23,038 crore, up 14% from a year earlier, as net interest income rose 14% and beat the brokerage's estimate by 2%. Domestic net interest margin widened 11 basis points to 3.11%, above management's floor of 3%. Loan growth of 18% stayed within guidance, while slippages eased. The brokerage calls the unchanged margin guidance conservative and flags slower deposit growth as the key risk.
BUY maintainedICICI Securities | Q2FY27 results updateTarget unchanged
SBI: The Banyan Grows Steadily, and Its Margin Roots Run Deeper Than Guided
ICICI Securities keeps a Rs 1,300 target on India's largest lender after a quarter of 14% profit growth, a margin that cleared its own floor and the cleanest slippage print in a year.
Report dated Nov. 4, 2026 | Analysts: Jai Prakash Mundhra, Amansingh Sahajsinghani
The banyan at a glance
Target
Rs 1,300
CMP
Rs 970
Upside
~34%
52-wk
1,235 / 934
ICICI Securities describes State Bank of India's (SBI) July-September quarter as steady, with one clear upside surprise: margins. Net interest income (NII) grew 14% from a year earlier and 5% sequentially, 2% ahead of the brokerage's estimate, even as loan growth of about 3% for the quarter trailed the banking system. Reported profit of Rs 23,038 crore rose 14%, helped by a one-time gain on the SBI Funds Management stake sale.
The brokerage says it appreciates SBI's "focus on profitable growth" and keeps its Rs 1,300 target, set at about 1.5 times FY28 estimated core adjusted book value plus the value of its subsidiaries.
Counting the Quarter's Rings
The Margin Rings Widen
Outer ring: domestic NIM 3.11% (+11 bps)
Middle: global NIM 2.94% (+8 bps)
Core: overseas NIM 1.97% (-2 bps)
Better yields, stable funding costs. The calculated yield on assets rose 6 bps sequentially while the cost of funds edged up only 2 bps. SBI used foreign currency non-resident (FCNR-B) inflows of about Rs 1.03 lakh crore (converted at the report's implied exchange rate) to run down costlier bulk deposits and cut borrowings by about Rs 79,000 crore. It also let go of low-yielding proposals and renewal requests.
Guidance left at the floor. First-half domestic NIM averaged 3.06%, yet management held its guidance of "not less than 3%." ICICI Securities sees upside risk to that number. With about Rs 4.8 lakh crore of excess statutory liquidity and a liquidity coverage ratio of 140%, up from 126%, the bank says it may not need to raise deposit rates soon.
Rate mix. Repo-linked loans make up 32% of the book, MCLR-linked 27%, fixed-rate 21% and T-bill-linked 17%.
Where the Roots Are Growing
Advances grew 18% year on year and 3.3% sequentially, helped by FCNR-funded lending of about Rs 83,300 crore. Year-to-date growth stands at 6%, and management keeps its 14% to 15% FY27 loan growth guidance. The prop roots below hang from the canopy to show each segment's year-on-year growth.
14.5%
Retail personal
22.6%
Agri
22.0%
SME
16.1%
Corporate
22.9%
Overseas offices
- MSME has grown faster than 17% for a 10th straight quarter, aided by disbursals of about Rs 28,800 crore under the ECLGS 5.0 credit guarantee scheme.
- Gold loans rose about 90%, while Xpress Credit, the unsecured salary loan product, grew only 7% to 8%, below the system.
- Corporate loans rose just 1% in the quarter as the bank churned low-yielding exposure; management expects 15% to 16% corporate growth, weighted to the second half.
- Auto loans picked up in October after a pricing tweak and are being used to bring in new customers. Home loans grew slowly but gained share in a slower market.
The Soil Beneath: Deposits
Deposits rose 12% year on year and 4.5% sequentially, but the low-cost CASA share slipped to 36.6% from 38.0% a year earlier, with CASA growing just 8%. Management says it keeps winning non-government current account balances but faces pressure on government balances, and that daily average CASA balances are better than the period-end figures suggest.
ICICI Securities names slower deposit growth as the key risk to its call, even though its charts show SBI with the lowest deposit run-off rates among large peers.
Fewer Falling Leaves: Asset Quality
Opening GNPA
Rs 74,300 cr
+ Slippages
Rs 5,400 cr
- Recoveries, upgrades
Rs 3,200 cr
- Write-offs
Rs 3,900 cr
= Closing GNPA
Rs 72,500 cr
Annualised slippages eased to 0.42% from 0.59% in the June quarter, and credit cost fell to 25 bps. Gross NPA improved to 1.38% and net NPA to 0.36%, with provision coverage at 74.4%. Agri GNPA, still the weakest pocket, fell 47 bps to 6.56%.
Two overhangs look manageable. Management is watching agricultural stress and puts the outer limit for potential restructuring at about Rs 10,000 crore. The one-time hit from moving to expected credit loss (ECL) provisioning is estimated at Rs 19,500 crore net of tax, about 3% of net worth and 46 bps of risk-weighted assets. Common equity tier-1 capital rose to 13.34%, helped by the mark-to-market gain on the NSE stake.
One-Offs in the Branches
- Treasury: a Rs 7,290 crore gain on the SBI Funds stake sale was partly offset by a Rs 1,280 crore mark-to-market loss on bonds. The Rs 2,400 crore NSE listing gain went straight to reserves, with no profit impact.
- Front-loaded costs: operating expenses rose 10%, partly from about Rs 1,250 crore of upfronted items, including a higher priority-sector certificate cost of Rs 583 crore against Rs 180 crore last quarter. Other provisions included Rs 940 crore for performance-linked incentives.
- Core profitability: core fee income grew 11%. Core pre-provision profit fell 7% sequentially, or about 3% after adjusting for the front-loaded costs. Return on assets improved 8 bps to 1.19%, ahead of the 1% guidance.
The Brokerage's Forecasts
EPS estimates were raised 2% for FY27 and 5% for FY28. Return on assets is modelled flat at 1.1% throughout.
Trunk and Branches: How Rs 1,300 Is Built
Sum of the parts, Rs per share
What investors are being offered. At Rs 970, the stock sits about 22% below its 52-week high of Rs 1,235 and close to its low of Rs 934. ICICI Securities' target implies roughly 34% upside over 12 months, with subsidiaries contributing Rs 265 of the value after the holding-company discount.
The thesis in one line. A strong first half makes the unchanged margin guidance look conservative, and the agri and ECL overhangs appear contained.
What to track next. Watch the CASA trend, whether corporate growth picks up in the second half as guided, and the final ECL transition number.
Weather the Tree Must Withstand
Printed key risk
Slower deposit growth. CASA grew 8% and its share has fallen 140 bps in a year; deposits are growing slower than loans.
TopNews watch
Earnings growth slows. The brokerage models EPS growth of just 4.9% in FY28 and return on equity easing to 15.6%, which leaves the re-rating case leaning on valuation.
Editor's note
1. Core profit wording. The summary says core pre-provision profit "shrank ~7%" sequentially but was "broadly stable" after adjusting for front-loaded costs. The section heading and detailed text put the adjusted figure at down 3%. TopNews uses the 3% figure.
2. Mislabelled table and two loan totals. The "Other Highlights" table is headed Q1FY26, Q1FY27 and Q4FY26 but carries Q2FY26, Q2FY27 and Q1FY27 data. It shows advances of Rs 51.54 lakh crore, while the segment table totals Rs 52.08 lakh crore (+17.8%) without saying whether one is gross and the other net.
3. Retail GNPA. The product table shows "other personal loans" GNPA dropping from 0.59% to 0.05% and total retail at 0.57%, while the segment table shows personal loans at 0.65%. The 0.05% looks like a typo. Total GNPA is also printed as 1.38% in one table and 1.39% in another.
4. Valuation multiples. At Rs 970, the report's own adjusted book values imply 1.57x FY27E and 1.39x FY28E, against the printed 1.4x and 1.2x. The FY25 figure (2.1x) does match.
5. Smaller points. The summary says agri restructuring will be "well below" Rs 10,000 crore, while the call notes call Rs 10,000 crore the outer limit. The notes also say the bank expects a 50 bps repo rate hike in December while 10-year yields ease to 7%, an unusual pairing that TopNews reports as printed.
Sources
ICICI Securities, State Bank of India Q2FY27 Results Update, Nov. 4, 2026; State Bank of India company filings and earnings call; Bloomberg; SES ESG.
Disclaimer: This TopNews Stock report is based on a brokerage research report and is for information only. It is not investment advice. Investments in securities markets are subject to market risks; read all related documents carefully and consult a registered financial adviser before investing.
