State Bank of India (SBIN IN) – Q3FY26 Result Update – Remains a top performer; LDR/LCR dynamic a key – BUY
Published on 08 Feb 2026
SBI saw a strong quarter yet again; core PAT beat PLe by 14.5% led by better loan growth, NII/NIM, core fees, core PPoP and asset quality. Credit growth was healthy at 15.6% YoY led by corporate SME and agri; bank increased its guidance for FY26E by 1%; we raise loan growth for FY26/27/28E by 3%/1%/1% to 16%/13%/13% YoY. Despite strong corporate growth, reported NIM was up by 2bps QoQ to 2.99% led by 317bps rise QoQ in LDR to 81.2% and control in cost of funds. We are watchful of loan/deposit growth dynamic as surplus liquidity is reducing. Asset quality continues to remain benign and there are downside risks to our provision estimates of 42bps. Earnings quality remains one of the best; for FY27/28E we raise core PAT by avg. 6.0% and core ABV by avg 5.0% (due to lower GNPA). We increase multiple to 1.4x from 1.3x on sep’27 core ABV and raise SOTP-based TP to Rs1,200 from Rs1,100. Retain ‘BUY’.
