SBI shares zoom 7% after strong Q3 result. Should you buy now?

Shares of State Bank of India (SBI), the country’s largest public sector lender, rose as much as 6.6% to their day's high of Rs 1,137 on the BSE on Monday after a strong performance in the third quarter of FY26.

SBI posted a 24% year-on-year (YoY) jump in standalone net profit at Rs 21,028 crore for Q3FY26, marking the highest-ever quarterly profit. The strong earnings were supported by sustained loan growth and stable margins.

Net Interest Income (NII), a key indicator of core lending performance, rose 9% YoY to Rs 45,190 crore, while operating profit (before provisions and contingencies) surged 40% YoY to Rs 32,862 crore, reflecting improved operating leverage.


The bank’s net interest margin (NIM) stood at 2.99% for the quarter, with domestic NIM at 3.12%. For the nine months ended December 2025, domestic NIM averaged 3.08%, indicating margin stability despite a challenging interest rate environment.

What should investors do?

1) Motilal Oswal | Buy | TP: Rs 1,300
The brokerage reiterated its ‘Buy’ rating on State Bank of India with a revised target price of Rs 1,300, implying an upside of 22% from current levels. It said the lender delivered a strong all-round performance, supported by healthy business growth, margin expansion and stable asset quality.

Net interest margin expanded 2 basis points QoQ to 2.99%, while domestic NIM stood at 3.12%. The bank expects NIM to remain above 3% in FY26 and over the longer term. Profitability was aided by strong fee-based income, with the cost-to-income ratio likely to stay around 50%.

The brokerage raised its earnings estimates by 3% and 4.3% for FY27 and FY28 respectively, and expects FY27 RoA/RoE at 1.1% and 15.9%. Motilal Oswal reiterated its ‘Buy’ rating with a revised target price of Rs 1,300, valuing the bank at 1.4x FY28E ABV plus Rs 354 for subsidiaries.

2) Nomura | Buy | TP: Rs 1,235
Nomura maintained a ‘Buy’ rating on State Bank of India with a target price of Rs 1,235. The brokerage noted that NIMs remained resilient, expanding 2 basis points QoQ and comparing favourably with peers, while loan growth of 16% YoY outpaced competitors despite a large base. Core profitability metrics also continued to remain stronger than peers.

The brokerage raised its FY26 loan growth forecast to 16% from 13% earlier and increased FY26F as well as FY27–28F EPS estimates by 5% and around 2% respectively, supported by improved operating leverage and higher other income.

At about 1.2x Dec-27F BVPS compared with 0.8x in Sep-25, it believes a significant part of the re-rating has already played out, and expects further upside to be driven more by earnings growth than multiple expansion.

3) JM Financial | Buy | Rs 1,250
JM Financial reiterated its ‘Buy’ rating on State Bank of India with a target price of Rs 1,250, citing strong and diversified growth, resilient margins despite deposit pressures, industry-leading asset quality and sizeable provision buffers that support improved earnings visibility and balance-sheet strength. The brokerage added that sustained RoA of around 1%+ and a healthy mid-teen RoE profile justify a premium valuation compared with historical PSU bank benchmarks.

4) Nuvama | Buy | TP: Rs 1,250
Nuvama Institutional Equities raised the target price to Rs 1,250 and maintained its Buy rating on the stock. SBI’s core earnings outperformed private peers for the third consecutive quarter, supported by stable NIMs, loan growth above the sector average and strong fee income. Management revised FY26 loan growth guidance to 13%–15% from 12%–14% earlier and expects NIM to remain above 3% in Q4. The brokerage described SBI’s Q3FY26 performance as the strongest among large banks.

The brokerage expects double-digit corporate loan growth to continue into Q4FY26, while management has maintained an exit NIM guidance of around 3% for FY26 with a long-term aim of sustaining this level across cycles. It also highlighted the bank’s target to keep the cost-to-income ratio below 50% over the next two to three years and maintain a through-cycle RoA of around 1%, with current performance tracking above this level for the first nine months.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)