State Bank of India shares have fallen over 20% from their peak following the announcement of Q4 earnings that revealed margin contraction and sequential decline in net interest income. According to reports from The Economic Times, the stock lost momentum after hitting its 52-week high of ₹1,235 on the NSE, having rallied 60% between May and February and outperforming the sector and most PSU bank peers. The underperformance reflects broader market challenges, with Nifty and Bank Nifty down 10% year-to-date, while the sectoral benchmark Nifty PSU bank has declined over 5% in this period. Latest market developments show Indian stock markets saw a massive sell-off on Tuesday as the BSE Sensex crashed nearly 1,500 points, wiping out around ₹10 lakh crore in investor wealth. As per The Week, IT and realty stocks led the market crash, while the rupee hit a record low against the US dollar, adding to the overall market pressure.
SBI reported net interest margins (NIMs) contracted both year-on-year and sequentially, while net interest income (NII) declined 1.4% quarter-on-quarter. As reported by The Economic Times, the operating profit stood at ₹27,704 crore, falling 16% YoY and 11.5% QoQ versus ₹31,286 crore in Q4FY25 and ₹32,862 crore in Q3FY26. The net interest income stood at ₹44,380 crore, sliding 1.35% QoQ but rising 4% YoY. Despite margin pressures, the bank reported standalone net profit of ₹19,684 crore, rising 6% YoY and beating analyst estimates of ₹18,898 crore. The bank attributed the net profit growth to higher interest income as well as investment income, with robust performances from subsidiary companies also contributing to the quarterly profit growth.
According to The Economic Times, the loan book grew 17% YoY, continuing to outpace the system led by corporate and overseas segments, while deposit growth of 11% YoY raises liquidity risks. The bank's asset quality improved across segments with credit costs moderating despite a slight uptick in gross slippages. As reported by HDFC Securities, the earnings missed estimates on the back of margin collapse despite healthy growth on both sides of the balance sheet and strong fee income profile.
Despite the negative market response, brokerages maintain a positive outlook on SBI's fundamentals. As reported by The Economic Times, Axis Securities believes SBI remains well-placed to deliver healthy medium-term earnings growth supported by steady credit expansion and improving fee income. The brokerage highlighted management's confidence in sustaining domestic NIMs near 3% through better asset mix and stronger CASA mobilisation. Technical analysis suggests the ₹960 area becomes an important support zone, while recovery above ₹1,000 could help sentiment stabilise again.
