SBI shares buck the trend in a weak market after a ‘double upgrade’ from Citi

SBI

outlined multiple liability-cost optimisation initiatives, yield levers, Citi wrote in its note, adding that the management continues to guide for SBI’s Net Interest Margin (NIMs) to remain above 3%. The brokerage expects NIMs to be between 2.9% to 3% between financial year 2025-2027.
Unsecured retail slippages are contained at 0.5%, while the SME-2 pool is also reined in, according to Citi, who also added that credit costs will be curtailed at less than 50 basis points.
The brokerage believes that the restoration of risk-weights on NBFC lending will boost SBI’s CET-1 ratio by 25 basis points to 30 basis points. However, market sentiments are currently weak and there is also a near-term overhang of a potential equity fund raise surrounding SBI.Citi is factoring in a 13% to 14% loan growth for SBI, along with curtailed credit costs. Therefore, it has revised its earnings estimates for the lender by 1% to 2% for financial year 2026-2027.

Shares of SBI have also underperformed the Nifty Bank over the last three, six and 12 months, making valuations inexpensive. The stock currently trades at 0.85 times price-to-book.

Out of the 50 analysts that have coverage on State Bank of India, 40 of them have a “buy” rating, seven say “hold”, while three have a “sell” rating on the stock.

Shares of SBI are bucking the trend in an otherwise weak market, trading 1.7% higher at ₹707. The stock has corrected 23% from its recent peak of ₹912.