DAM Capital has maintained a ‘Buy’ rating on State Bank of India (SBI) while raising its target price from ₹915 to ₹930. The brokerage noted that SBI’s operational performance was mixed, with a slight miss on net interest income (NII), which fell 1% short of expectations due to slower loan growth.
However, the bank maintained its net interest margins (NIMs) at 3%, which DAM Capital highlighted as a positive trade-off between margin and growth. Treasury gains were utilized to offset performance-linked incentives (PLI) for employees, with part of the impact also reflected in provisions, as these incentives are yet to be formally accepted by the government.
Loan growth slowed to 12% YoY (4% QoQ), slightly below estimates, though corporate loan growth remained strong at 5% QoQ, bolstered by payments from CPSEs. Retail segments such as home loans (4% QoQ) and auto loans (2% QoQ) also contributed to overall momentum.
DAM Capital now expects moderate loan growth of 12–13% in FY26, with NIMs holding steady at 3%. While assumptions on growth and margins have been slightly lowered, the brokerage has maintained its earnings per share (EPS) estimates, projecting 11–12% earnings growth driven by industry-beating loan expansion and cushion in the credit-deposit ratio.
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