SBI remains in focus after strong results in Q3FY26; Nuvama increases the target to Rs 1,250

Shares of State Bank of India (SBI), the country’s largest public sector lender, are expected to remain in focus during Monday’s trading session after a strong performance in the third quarter of FY26. The bank reported robust earnings growth, steady improvement in asset quality and healthy loan growth, prompting brokerage Nuvama Research to raise its outlook on the stock with a price target of Rs 1,250.SBI posted a 24% year-on-year (YoY) increase in standalone net profit at Rs 21,028 crore for Q3FY26, marking the highest ever quarterly profit for the bank. The strong profits were supported by continued lending growth and stable margins.

Net interest income (NII), a key indicator of core loan performance, rose 9% y-o-y to Rs 45,190 crore, while operating profit (before provisions and contingencies) rose 40% y-o-y to Rs 32,862 crore, driven by improved operating leverage.

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

Asset quality continued to improve. SBI’s gross NPA ratio fell to 1.57%, an improvement of 50 basis points year-on-year, while net NPA fell to 0.39%, a decline of 14 basis points. The slippage ratio remained limited at 0.40% and credit costs were low at 0.29%, underlining effective risk management.

The provision coverage ratio (PCR), including AUCA, stood at 92.37%, providing a strong buffer against potential stress.

On the balance sheet front, SBI’s total business crossed Rs 103 lakh crore, with deposits exceeding Rs 57 lakh crore and advances crossing Rs 46 lakh crore. Advances grew 15% year-on-year, mainly driven by 15% growth in domestic lending, underscoring stable demand across all segments. Shares of SBI closed marginally lower on Friday, falling 0.70% to settle at Rs 1,066.

Broker view:

Nuvama Research raised its outlook for SBI after strong Q3 performance and raised FY26 loan growth expectations to 13%–15% from the previous 12%–14%.

The most important highlights from the brokerage view include:

• Double-digit corporate loan growth is expected to continue into the fourth quarter of 2026
• Exit NIM guidance of around 3% for FY26 maintained, with a long-term target to maintain this level across cycles
• The cost-income ratio should remain below 50% for the next two to three years
• Target return on assets (ROA) of 1% over cycles, tracking current performance higher over the first nine months

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