SBI overtakes TCS to become India’s fourth largest company as third-quarter rally sees jump in market capitalization

Leading public sector lender State Bank of India (SBI) has overtaken IT services firm Tata Consultancy Services (TCS) to become the country’s fourth-largest listed company by market capitalization, riding on a sharp post-earnings recovery and renewed optimism around public sector banks.SBI’s market capitalization now stands at almost Rs 10.92 lakh crore, compared to TCS at Rs 10.52 lakh crore. The top three remain Reliance Industries at Rs 19.87 lakh crore, HDFC Bank at Rs 14.16 lakh crore and Bharti Airtel at Rs 11.47 lakh crore, as of Wednesday’s close.

The rebalancing follows an 11% rally in SBI shares in the past three trading sessions following strong third-quarter results, while TCS has fallen nearly 4% in the past five days amid broader concerns over artificial intelligence-led disruption in the global IT services sector.Weak sentiment around technology stocks has dragged down India’s IT counters over the past week, helping SBI’s rise in the rankings.

SBI reported a net profit of Rs 21,030 crore for the third quarter, up 18% over Street estimates, driven by higher fee income and lower-than-expected provisions. Net interest income rose 9% year-on-year to Rs 45,190 crore, while margins remained stable at 2.99%, while domestic margins increased to 3.12%. Management expressed confidence in maintaining margins above 3% in FY26 and over the long term.

The loan portfolio grew by 15.6% year-on-year, exceeding deposit growth of 9%, reflecting healthy credit demand. Asset quality continued to improve, with slippages declining and credit costs remaining favorable at 29 basis points.

Brokers have become constructive towards the lender following the third quarter earnings results. Jefferies set a price target of Rs 1,300, citing strong equity returns and subsidiary values. The brokerage has upgraded its earnings estimates and expects double-digit core earnings growth over the next three years, valuing the bank at 1.5x FY28 adjusted book value. Motilal Oswal has also raised earnings estimates and expects healthy return ratios considering around Rs 354 per share from subsidiaries.

Nomura raised its target to Rs 1,235, reflecting improved RoE prospects, while JP Morgan maintained an overweight stance with a target of Rs 1,250, saying SBI continues to deliver above-system growth with best-in-class asset quality among major public sector lenders.

Morgan Stanley struck a more balanced tone and maintained an equal-weight rating, noting that valuations are approaching reasonable levels unless revenue growth surprises on the upside. BofA Securities remained neutral with a target of Rs 1,100, saying that at current multiples, the risk-reward ratio appears broadly balanced.

The contrasting trajectories of SBI and TCS highlight a broader market rotation. While banks benefit from credit growth and improving balance sheets, IT stocks face near-term uncertainty over AI-induced pricing pressures and global technology spending.