Institutional investors are showing renewed confidence in India’s largest public sector lender, State Bank of India (SBI), as both foreign and domestic players raise their stakes amid strong earnings momentum and a positive outlook from analysts.
Price, Valuation, and Technical Outlook
In the September quarter, SBI reported a 10% year-on-year rise in standalone net profit to Rs 20,159 crore, up from Rs 18,331 crore in the same period last year. This marks the first time in five quarters that the bank has crossed the Rs 20,000-crore profit mark, last achieved in March 2024 when it posted Rs 20,698 crore.
Investor sentiment remains buoyant. According to the latest shareholding pattern, foreign institutional investors (FIIs) increased their stake to 9.57% in the September quarter, compared to 9.33% in the previous quarter. Domestic institutional investors (DIIs) followed suit, raising their holding to 27.65% from 25.69%. Interestingly, SBI’s promoter holding dipped to 55.50% from 57.42% sequentially, suggesting that institutions are taking a stronger position in the stock.
Brokerage firm ICICI Securities has reiterated its bullish stance on SBI, maintaining a “Buy” rating with an unchanged target price of Rs 1,150 per share — an upside potential of about 20% from current levels. The firm values SBI’s core FY27E banking operations at roughly 1.5 times book value.
At the ICICI Securities India Conference 2025, management reaffirmed SBI’s commitment to scaling with discipline, focusing on steady and prudent growth. The bank’s net interest margin (NIM) improved quarter-on-quarter and is expected to maintain its trajectory barring any sharp interest rate movements. Core fee income registered a robust 25% year-on-year growth in Q2FY26, strengthening overall profitability.
Analysts highlighted that SBI’s performance in loans, NIM, fee income, and asset quality compared favourably with peers during the quarter. While potential stress in loan books remains a key risk, sustained operational efficiency and disciplined credit expansion continue to drive optimism for the banking giant.
Price, Valuation, and Technical Outlook
SBI’s share price is currently around Rs 958, which is close to its 52-week high of Rs 971.40. The bank’s market capitalisation is approximately Rs 8.86 lakh crore, reflecting its position as one of India’s largest financial institutions.
From a valuation perspective, SBI is trading at a price-to-earnings (P/E) ratio of 10.9, indicating how much investors are willing to pay for each rupee of earnings. Its price-to-book (P/B) ratio of 1.69 suggests the stock is valued at about 1.7 times its book value, which is typical for a large, stable banking stock.
On the technical side, the 14-day Relative Strength Index (RSI) is 71.6. Since an RSI above 70 generally signals an overbought condition, the stock may be due for a short-term pullback or consolidation.
Additionally, SBI is trading above all eight key Simple Moving Averages (SMAs) — from the 5-day to the 200-day SMA. This alignment of price above every major moving average reflects a strong bullish trend and sustained buying momentum.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)