State Bank of India share price jumped one percent on Friday. The stock closed at Rs 804.55 after touching an intraday high at Rs 809.45. The stock could face a resistance around Rs 830-835 but the current sentiment is positive on the stock. With its stock regaining momentum after a mild correction and analysts projecting robust upside potential, SBI remains a cornerstone of India’s banking landscape. Backed by resilient financials, improving asset quality, and strategic capital plans, the lender is gearing up for renewed growth in FY26.

Stock Performance: Reversal in Motion

On June 27, 2025, SBI shares closed at ₹805.40, posting a 1.05% gain over the previous session. The stock has retraced from its 52-week high of ₹899, touching lows of ₹680, but recent gains signal a potential trend reversal. Momentum indicators have turned favorable, with the stock trading above key moving averages.

Short-term technical analysts advise a buy-on-dips strategy, suggesting an upside target of ₹865–₹875 over the next 1–2 months, with a protective stop loss at ₹741. Despite a 4.57% annual decline, the stock’s 4.29% three-month gain underlines nascent recovery and stabilizing investor sentiment.

Annual and Quarterly Financials: Robust at the Core

SBI’s financial muscle remains intact. For FY25, the lender reported a consolidated revenue of ₹6,63,343 crore and a Profit After Tax (PAT) of ₹77,561 crore, translating to a solid Return on Equity (ROE) of 18.57%. On a standalone basis, net profit rose 16% YoY to ₹70,901 crore.

However, Q4 FY25 showed signs of deceleration. PAT came in at ₹19,600 crore, down 8.34% YoY, impacted by narrowing margins and modest credit growth. Yet, asset quality strengthened, with Gross NPA and Net NPA ratios falling to 1.82% and 0.47% respectively — the lowest in four years.

Valuation-wise, SBI trades at a P/E of 9.21 and P/B of 1.66, positioning it attractively among peers for long-term investors seeking both growth and value.

Strategic Fundraising and Debt Market Activity

To support its FY26 credit growth target of 12–13%, SBI plans to raise ₹5,000 crore via Basel III-compliant Tier II bonds in July–August 2025. This marks its return to the bond market after shelving a prior issue earlier this year due to unattractive yields.

On the equity front, the bank is set to mobilize up to ₹25,000 crore to strengthen its capital buffer, positioning itself for expansion and enhanced resilience.

While other PSU banks stayed away from the debt markets in early 2025, SBI’s proactive capital strategy — in contrast to ICICI Bank’s ₹10 billion issuance — reflects its leading role in sectoral fundraising dynamics.

Interest Rate Trends and Policy Landscape

The evolving rate environment remains a double-edged sword. Anticipated rate cuts by the RBI in the second half of 2025 could spur credit demand and ease funding costs. However, they may also compress SBI’s Net Interest Margins (NIM), a key source of profitability.

In a preemptive move, SBI slashed its fixed deposit rates by 25 basis points across 1–3 year maturities — aligning with softening inflation and the broader rate cycle.

Strategic Divestments: Unlocking Hidden Value

In a bid to streamline operations and unlock capital, SBI is advancing talks with Sumitomo Mitsui Banking Corporation to offload its 23.97% stake in YES Bank. If executed, the transaction could significantly bolster SBI’s balance sheet.

Simultaneously, deliberations are underway regarding the divestment of a minority stake in SBI General Insurance, with Warburg Pincus reportedly seeking an exit. Both deals underscore SBI’s broader push toward capital optimization and shareholder value creation.

Analyst Sentiment and Institutional Support

As of June 2025, analyst consensus remains overwhelmingly bullish. 80.95% of the 43 analysts covering the stock issue a ‘BUY’ rating, with an average target price of ₹926.43, indicating a potential 15% upside.

Key Ratings:

• CLSA: ‘Outperform’, 32% upside potential
• Citi: Raised target to ₹830
• ICICI Securities: Target ₹950, reiterates ‘BUY’
• Axis Securities: Target ₹1,025, rates ‘OVERWEIGHT’

For short-term traders, Dharmesh Shah (ICICI Securities) issued a ‘BUY’ call with a target of ₹868 and a stop loss at ₹789 on June 10, 2025.

Strengths and Vulnerabilities

Strengths:

• Market Leadership: Dominant share in deposits, advances, and digital channels
• Asset Quality: Multi-year low NPAs reflect prudent risk management
• Profitability: Consistent PAT growth, with FY25 ROE at 18.57%
• Valuation: Reasonable P/E and P/B offer upside
• Operational Efficiency: Net profit per employee continues to rise

Risks:

• Margin Compression: RBI easing cycle may impact NIMs
• Loan Growth: Sensitive to macro fluctuations
• Quarterly Volatility: Earnings can swing sharply, as Q4 FY25 demonstrated
• PSU Overhang: Policy and regulatory risks remain inherent

Sector Dynamics and Economic Context

The Nifty Bank index scaling 57,400+ in late June 2025 confirms resurgent investor appetite. However, sector-wide profitability — Q4 net profit rose just 4.9% YoY — underscores margin-related pressure points, particularly for private lenders.

SBI, as a bellwether, has both contributed to and weathered this trend. While foreign institutional interest in the stock dipped marginally, the bank continues to benefit from global investor confidence in India’s macro trajectory.

Forward-Looking Strategy and Economic Tailwinds

SBI’s strategic blueprint emphasizes digitalization, credit expansion, and robust capital positioning. The upcoming capital infusion will support its ambition to clock 12–13% credit growth in FY26.

Macroeconomic trends — including anticipated RBI rate cuts and the government’s strong fiscal buffer — offer a supportive backdrop for credit expansion. Additionally, the bank’s renewed focus on digital platforms and professional talent is expected to enhance operational agility.