Citi has reiterated its Buy rating on State Bank of India (SBI) and raised its target price to ₹1,265, following a strong Q3FY26 performance marked by robust credit growth, stable margins and tight cost control.
Citi said SBI’s core earnings surpassed expectations, underpinned by credit growth of 15.6% YoY and 6% QoQ, alongside NIMs of 2.99%, up from 2.97% in the previous quarter. Operating efficiency improved meaningfully, with opex growth curtailed to 6% YoY and declining 1% QoQ, while credit costs remained well-contained at 0.4%.
One-offs add to already strong operating performance
Beyond core operations, Citi highlighted several positive one-offs that boosted profitability, including ₹22 billion in dividend income, ₹33 billion in treasury gains, and ₹26 billion in recoveries from written-off accounts, lifting RoA to 1.19%.
Growth momentum remained broad-based across SME, corporate, agriculture and Xpress Credit, prompting management to once again raise FY26 credit growth guidance to 13–15%. Citi expects NIMs to sustain at or above 3%, supported by disciplined underwriting and continued recoveries, which should keep asset quality robust.
Citi believes SBI’s scale, diversified earnings profile and improving efficiency position it well for sustained profitability, justifying its positive stance despite the stock’s recent rally.
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