Analysts Revise SBI Earnings Estimates Following Q4 Results
SBI stock: Brokerages cut FY27 estimates after Q4 miss; should you sell?
Business Standard
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Analysts have lowered their earnings estimates and target prices for the State Bank of India (SBI) after a disappointing Q4 performance, where net profit rose by 5.6% year-on-year but fell 6.4% quarter-on-quarter to ₹19,684 crore. Despite strong loan growth, a decline in net interest margin and increased slippages raised concerns.
- 01SBI's net profit for Q4FY26 was ₹19,684 crore, a 5.6% increase year-on-year but a 6.4% decrease quarter-on-quarter.
- 02The bank's net interest margin fell to 2.8%, impacting net interest income, which was ₹44,380 crore.
- 03Analysts have cut FY27 earnings estimates by 6% to 3% across various brokerages.
- 04SBI expects to maintain credit growth of 13-15% and NIMs above 3% in FY27.
- 05Brokerages recommend a 'Buy' rating with target prices ranging from ₹1,225 to ₹1,300.
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The State Bank of India (SBI) reported a net profit of ₹19,684 crore for the March quarter (Q4FY26), reflecting a 5.6% increase year-on-year but a 6.4% decline quarter-on-quarter. This performance fell short of analyst expectations, primarily due to a significant contraction in its net interest margin (NIM), now at 2.8%, and increased treasury losses. Despite a robust loan book growth of 17.2% year-on-year, net interest income (NII) was ₹44,380 crore, missing estimates. Analysts have responded by adjusting their earnings forecasts for FY27, with reductions ranging from 3% to 6%. SBI remains optimistic, projecting credit growth of 13-15% and aiming to sustain NIMs above 3%. Brokerages like Emkay Global and Motilal Oswal continue to recommend 'Buy' ratings, with target prices set between ₹1,225 and ₹1,300. They highlight the bank's strong credit growth and resilience despite challenges in NIM and slippages, which rose to ₹5,548 crore in Q4.
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The decline in SBI's net interest margin could lead to higher borrowing costs for consumers, impacting home loan EMIs and other credit products.
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