SBI shares down 2% post Q4; should you buy, hold, or sell PSU bank stock?

Shares of State Bank of India (SBI) slid 2% on Monday even after the country’s largest public sector lender reported better-than-expected earnings in the fourth quarter ended March 31, 2025. The PSU heavyweight has declared a dividend of ₹15.90 per equity share of ₹1 each for the financial year ended March 31, 2025. It has also approved capital raise of up to ₹25,000 crore.

Snapping previous session gains, shares of SBI declined as much as 2% to hit an intraday low of ₹783.65 on the BSE, while the market capitalisation slipped to ₹7.04 lakh crore. Early today, the banking heavyweight opened 1.9% lower at ₹784.95, after ending 1.5% higher on Friday.

The shares of SBI are down 14% from its 52-week low of ₹912.10 touched on June 3, 2024, while it has risen 15% against its 52-week low of ₹679.65 hit on March 3, 2025. The counter has added nearly 6% in a month, while it has delivered flat return in the calendar year 2025. The PSU bank stock has given negative return of over 2% in a year, while it lost 7% in six months.

Should you buy, hold, or sell SBI shares post Q4?

For January-March quarter of FY25, SBI reported 10% decline in its standalone net profit at ₹18,643 crore as compared to ₹20,698 crore in the year ago period. The total income jumped 12% to ₹1.43 lakh crore from ₹1.28 lakh crore in the same period last year. During the quarter under review, the bank earned an interest income of ₹1.20 lakh crore as against ₹1.11 lakh crore in Q4 FY24.

On the asset quality front, the PSU lender saw an improvement, with gross non-performing assets (NPAs) dropping to 1.82% of the total advances in the fourth quarter from 2.24 % as of March 31, 2024. In a similar trend, net NPAs too declined to 0.47% as against 0.57% in Q4 FY24.

Post Q4 results, Axis Securities has maintained ‘BUY’ rating on SBI shares with an unchanged target price of ₹1,025 per share. “SBI remains well poised to continue its growth with no visible challenges to growth and asset quality…While we expect Opex and credit costs to remain controlled, possibility of near-term headwinds on NIMs cannot be ruled-out,” it said in a note.

ICICI Securities has also retained ‘Buy’ call on the stock with a revised target price of ₹950 from ₹930 earlier, valuing the FY27E core banking business at 1.25x. The brokerage in its report said that SBI is unlikely to cut its savings rate, as done by private peers. It has, however, withdrawn 400 days deposits scheme (offering 7.1%) and has cut 444 days rate from 7.25% to 7.05% in Apr’25.

Nuvama has also given ‘BUY’ with unchanged price target of ₹950, saying loan growth at 4% QoQ and 12% YoY was the highest among peers on QoQ basis but the YoY growth is slower than Q3 due to prepayment by PSUs. Loan growth for FY25 missed guidance of 14% due to lower domestic corporate growth. The management attributed this to unusual and unanticipated prepayments from large central PSU accounts in the corporate segment. These PSUs prepaid loans on receiving cash from the government, it said in a report.

Another domestic brokerage, JM Financial has also retained ‘Buy’ call on SBI shares with a target price of ₹960. “The Profitability will remain under pressure in FY26 given pressure on margins, normalisation of credit costs and higher cost to income ratio…We revise our FY26/FY27 EPS estimates by +5%/+1% and value the core bank at 1.2x FY27e Adj BVPS with SoTP based TP of ₹960 (subs valued at ₹242),” it said in a note.

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