SBI Share Price Target Raised To Rs 1,100 By Emkay - Here’s Why

Brokerage firm Emkay Global Financial Services has reaffirmed its bullish stance on State Bank of India (SBI), maintaining a BUY rating while revising the target price to ₹1,100, up 13% from the previous estimate. The revision reflects strong quarterly earnings and an optimistic outlook for the bank’s growth trajectory.

“SBI continues to report sector-beating credit growth of 13% YoY and margins of 2.97%, which, coupled with higher other income, led to a strong 7.4% PAT beat at ₹202 billion and a 1.2% RoA,” Emkay said in its report.

Robust Credit Growth and Margin Recovery
According to the brokerage, SBI’s credit growth remains ahead of the system, clocking 13% YoY and 4% sequentially in Q2, supported by healthy momentum in both retail and corporate (especially overseas) segments. Retail growth was led by Xpress credit, mortgages, vehicle finance, and gold loans.

The Net Interest Margin (NIM) improved by 7 basis points QoQ to 2.97%, aided by lower cost of funds and improved daily average balances. Emkay noted that management expects a U-shaped NIM recovery, supported by benefits from the recent CRR cut and a continued focus on CASA deposits.

Looking ahead, the bank projects credit growth of 12–14% for FY26, driven by 10–11% corporate credit growth and 19–20% MSME expansion. Margins are projected to remain above 3% in the second half of FY26.

Strong Asset Quality and Proactive Provisioning
SBI’s gross slippages were contained at ₹50 billion (0.5% of loans), leading to a 10 bps sequential decline in the GNPA ratio to 1.7%. The management remains cautious about any potential impact of global trade disruptions but does not foresee major stress at this point.

As a strategic investor, SBI was the only bank to recognize a stake sale gain of ₹46 billion from Yes Bank, still holding about 10.8% stake. “It prudently used the gain to shore up the specific PCR to 76% (vs 74.5% in Q1), thus preparing to limit the ECL impact from transition (effective April 1, 2027),” Emkay added.

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Valuation and Outlook
Emkay has rolled forward its valuation to September 2027 estimates, valuing the standalone bank at 1.3x ABV and subsidiaries/investments at ₹300 per share. The brokerage expects SBI to deliver a return on assets (RoA) of 1.0–1.1% and return on equity (RoE) of 15–16% after the recent capital raise.

“We remain positive on PSBs (including SBI) due to their improving growth trajectory, margin resiliency, and better asset quality performance,” Emkay said, adding that SBI is well positioned to benefit from these trends.