State Bank of India Shares Trade Higher as Markets Weigh Q2 Earnings Against Operating Expenses

Shares of State Bank of India (SBI) edged higher during Wednesday afternoon trade on the National Stock Exchange. The stock rose 0.73 per cent to ₹977.30 by around 1 pm, touching an intraday high of ₹988. Traded volume crossed 97.92 lakh shares with a total value of ₹957 crore, reflecting active market interest following the bank's recent Q2FY27 earnings release. Market data indicated that sell orders dominated the order book, accounting for 68.68 per cent of transactions.

Analyst reactions to the earnings report have been largely positive, though price targets diverge across brokerages. CLSA retained an Outperform rating with a target price of ₹1,325, pointing to a 2 per cent net interest income (NII) beat driven by an 11-basis-point quarter-on-quarter domestic net interest margin (NIM) expansion. Similarly, Citi maintained a Buy rating at ₹1,300, emphasizing resilient margins and clean asset quality. Axis Direct and Motilal Oswal kept Buy ratings with targets of ₹1,275 and ₹1,225 respectively, while Macquarie and HSBC reiterated Outperform and Buy ratings at ₹1,220. JM Financial trimmed its target to ₹1,215 from ₹1,275 while maintaining a Buy, and Kotak Institutional Equities held a Buy rating at ₹1,250.

However, cautious perspectives were also registered among institutional analysts. UBS and Nomura maintained Neutral ratings with a target of ₹1,100 each, drawing attention to weaker underlying pre-provision operating profit and softer retail loan growth. Bernstein adopted a Market Perform stance with a ₹1,300 target, noting that when excluding one-offs, earnings per share grew by 5 per cent year-on-year compared to the reported 13 per cent growth. Bernstein also highlighted a normalized return on assets (RoA) of 0.90 per cent, contrasting with the reported 1.19 per cent.

For the second quarter, SBI reported a profit after tax (PAT) of ₹230.4 billion, marking a 14.3 per cent increase year-on-year. This growth was boosted by a ₹72.9 billion one-time gain stemming from the SBI Funds stake sale, which was partly offset by ₹12.8 billion in treasury losses. Net interest income grew 14.3 per cent year-on-year to reach ₹491.4 billion. Bank management retained its full-year guidance for FY27, projecting 14 to 15 per cent loan growth, a 1 per cent return on assets, and domestic NIM exceeding 3 per cent.

Despite the recent trading activity, SBI shares remain well below their 52-week high of ₹1,234.70, which was recorded in February.

"State Bank of India's latest financial results demonstrate steady core performance supported by healthy net interest margins and consistent credit growth. However, the divergence in analyst targets highlights the importance of looking past headline figures. While one-time gains boost reported profitability, institutional investors are carefully monitoring operating expenses and retail loan momentum. For large legacy institutions, balancing cost efficiencies with sustainable loan expansion remains critical to driving long-term shareholder value." — Dr. Shishir Gupta, Founder & CEO, StartupLanes