SBI shares jump 7% to record high after Q3 profit hits all-time high; what should investors do?
- 9th February 2026
- 12:00 PM
- 4 min read
Summary
Shares of State Bank of India rose to a fresh record after the lender posted its highest-ever quarterly profit in Q3 FY26. Strong core income, sharp improvement in asset quality and a one-time dividend from its asset management arm supported earnings. Management also increased FY26 loan growth guidance, strengthening optimism on the growth outlookMumbai | February 9
Shares of State Bank of India (SBI) surged nearly 7% on Monday to hit a record high of ₹1,139.4, during intraday trade, after the public lender’s Q3 results surpassed expectations.
SBI reported a standalone net profit of ₹21,028 crore for Q3 FY26, up 24.5% from ₹16,891 crore in the corresponding quarter last year. The performance marked the highest quarterly profit in the bank’s history, driven by steady core income growth, improved asset quality and a one-off boost from its asset management business.
Record profit supported by core income and dividend boost
SBI’s total income during this quarter rose 9.7% YoY to ₹1.41 lakh crore, while net interest income increased 9% to ₹45,190 crore, compared to ₹41,445 crore in the same quarter last year, reflecting steady growth in core lending income. Operating profit too, surged nearly 40% to ₹32,862 crore, reflecting better operating leverage and higher fee income.
A key contributor to the profit jump was a special dividend of about ₹2,200 crore from SBI Mutual Fund, the bank’s asset management subsidiary that is preparing for an initial public offering. Management flagged the dividend as a one-time item that supported quarterly earnings.
Despite the strong headline numbers, margins remained broadly stable. The bank’s net interest margin (NIM) stood at 2.99% on a whole-bank basis, while domestic margins dipped marginally to 3.12%.
Asset quality improves to multi-decade best
SBI reported a sharp improvement in asset quality during the quarter. GNPA fell 12.7% YoY to ₹73,637 crore, while net NPAs declined 15.7% to ₹18,012 crore.
The gross NPA ratio improved to 1.57%, compared with 1.73% QoQ, marking the lowest level in nearly two decades. Net NPA ratio stood at 0.39%.
Provisions rose to ₹4,507 crore during the quarter, while fresh slippages increased modestly to ₹4,458 crore.
Management said the overall stress book remains manageable, with net stressed assets well below 1% of advances.
Loan growth outlook raised as demand broadens
SBI reported credit growth of 15.6% YoY in Q3, led by corporate, SME and agricultural loans. Retail lending also remained steady, supported by home loans and gold-backed credit.
Moreover, the management has also raised its loan growth guidance for FY26 to 13–15%, up from the earlier 12–14%, citing improving corporate demand and sustained traction across retail and SME segments.
As of Q3FY26, SBI’s total loan book stood at about ₹46.8 trillion, while deposits grew 9% YoY. The credit-deposit ratio remained comfortable at around 72%, providing room for further growth.
Stock performance
SBI shares have rallied sharply over the past year, rising more than 40% on a 12-month basis and over 65% from their 52-week low hit in March 2025.
PL Capital View on SBI
PL Capital has raised its target price on SBI to ₹1,200 from ₹1,100 earlier, led by strong earnings quality, sustained loan growth momentum and improving return ratios. The upward revision also factors in higher core profit estimates and a stronger balance sheet position. At the current market price of around ₹1,066, this implies a potential upside of about 12–13%.
PL Capital highlights SBI’s improving asset quality, stable margins near the 3% level and the embedded value of its subsidiaries under a sum-of-the-parts framework as key factors underpinning the revised view. The bank’s ability to sustain growth without compromising margins or asset quality remains central to the outlook.
To read the full PL Capital report on State Bank of India, click here.
Key risks to watch
Management cautioned that global trade uncertainty, geopolitical tensions, market volatility and commodity price movements remain key risks. Funding costs and the pace of deposit growth will also be important to monitor as system liquidity tightens.
For investors, the December quarter confirms SBI’s strong operating momentum, though future performance will depend on sustaining credit growth, managing margins and maintaining asset quality as the cycle evolves.
For more earnings and market updates, follow PL Capital.
