Emkay Global Financial has issued a buy rating on State Bank of India with a target price of ₹1,350 in its research report dated November 04, 2026. According to the report, the brokerage expects the bank to deliver ROA of ~1.1% and ROE of ~16% over FY27-FY29E period. The valuation is based on 1.4x Sep-28E ABV for the parent company and ₹318 per share for its subsidiaries and investments.
SBI reported a PAT of ₹230 billion with ROA of ~1.2%, which was broadly in line with estimates. As reported by Emkay Global, the performance was led by treasury gains of +39% quarter-on-quarter, including a one-off SBI Funds stake sale gain of ₹72.8 billion. However, this was partly offset by a treasury MTM loss of ₹12.8 billion and lower provisions that came in 27% below estimates. The PPoP was muted at ~1.4% year-on-year and 20% quarter-on-quarter due to lower other income that was 47% below estimates and higher operating expenses that were 3% above estimates.
According to the report, SBI maintained healthy loan growth of 18.2% year-on-year, with Management guidance of 14-15% growth in FY27. The bank continues to prioritize profitable growth, consciously forgoing low-yielding corporate and refinancing opportunities to protect margins. NIM expansion was driven by lower deposit costs, supported by FCNR(B)-led replacement of high-cost wholesale deposits and improved CASA balance. Management expects further upside from lagged EBLR/MCLR repricing while maintaining guidance above 3%.
As reported by Emkay Global, the management estimates net-of-tax ECL impact of ~₹195 billion. Additionally, ~₹100 billion of agricultural loans across three drought-affected states may qualify for restructuring. The bank's strategic approach includes maintaining focus on profitable growth while protecting margins through selective lending decisions.
