SBI shares jump over 6% on robust Q3; overtakes ICICI Bank as India’s 2nd most valued bank

Shares of State Bank of India (SBI) surged more than 6% in early trade today as investors cheered its robust December quarter earnings, which was better than street expectations. Driven by strong rally, the public sector bank has overtaken ICICI Bank to become India’s second most valuable listed bank by market capitalisation.

Boosted by its strong Q3 performance, SBI shares climbed as much as 6.6% to touch a fresh 52-week high of ₹1,136.85 on the BSE. The counter saw spurt in volume as over 7 lakh shares changed hands over the counter in the opening deals, compared with two-week average of 6.86 lakh stocks, taking its market capitalisation (m-cap) to ₹10.46 lakh crore.

On the other hand, ICICI Bank shares were down 0.32% at ₹1,402.10, with a m-cap of ₹10.02 lakh crore.

HDFC Bank retained its position as India’s most valued bank, with a market valuation of over ₹14.48 lakh crore, despite the stock trading marginally lower. HDFC Bank shares were down 0.03% at ₹940.85 on the BSE.

Meanwhile, Indian equity market saw positive opening today, with benchmarks – Sensex and Nifty – rising up to 0.45% in early trade.

SBI shares rebound 67% from 52-week low

Early today, SBI shares opened 5% higher at 1120, after ending 0.65% lower at 1066.40 on the BSE on Friday. Paring previous session losses, the PSU bank rallied over 6%, rebounding 67% from its 52-week low of ₹679.65 touched on March 3, 2025.

The PSU bank has added 37% in the past six months and 14.5% in the calendar year 2026.

Technically, SBI’s price action points to a strong bullish trend, with the stock trading firmly above all key moving averages. The counter is placed above its short-term 5-day and 20-day averages, as well as the medium- and long-term 50-day, 100-day and 200-day moving averages, underscoring sustained positive momentum and strong underlying trend strength, as per Markets Mojo, a stock market research platform.

All round Q3 performance boosted sentiment

The bank posted a strong set of numbers for the December quarter of FY26, with standalone net profit rising 24.5% year-on-year to ₹21,028 crore, compared with ₹16,891 crore in the corresponding quarter last year. The growth was supported by steady expansion in core earnings. Net interest income (NII) grew 9% YoY to ₹45,190 crore, up from ₹41,445 crore a year ago.

The country’s largest lender also reported a sequential improvement in asset quality during the quarter. The gross NPA ratio improved to 1.57%, compared with 1.73% in the preceding quarter, while the net NPA ratio moderated to 0.39% from 0.42% in Q2 FY26. Provisions fell to ₹4,506 crore during the quarter, lower than ₹5,400 crore in Q2 FY26 and significantly below the level seen a year earlier.

Brokerages remained positive on State Bank of India following its strong Q3 performance, citing diversified growth drivers, resilient margins amid deposit pressures, and industry-leading asset quality, while several raised their target prices on improved earnings visibility.

Motilal Oswal said SBI delivered a strong all-round performance, led by healthy business growth, stable-to-improving margins and benign asset quality trends. It reiterated its ‘BUY’ call and raised its target price to ₹1,300, factoring in higher earnings estimates and the value of subsidiaries.

The brokerage pointed to steady net interest margins of around 3%, robust fee income, and controlled operating costs, with the cost-to-income ratio expected to hover near 50%.

JM Financial said SBI’s strong and diversified growth profile, stable margins despite deposit competition, superior asset quality and sizeable provision buffers underpin its improving earnings outlook and balance-sheet strength. It maintained a BUY rating and raised its target price to ₹1,250, valuing the core bank at 1.4x FY28E standalone book value.

The brokerage noted that the bank’s ability to sustain return on assets of over 1% and deliver a mid-teen return on equity justifies a valuation premium over historical PSU bank multiples.

Emkay Global highlighted SBI’s sector-beating credit growth of 15.6% YoY in Q3, with momentum visible across all lending segments. It noted that margins remained largely stable at around 3 per cent, even as some public sector peers saw margin pressure. Higher other income, including dividends from SBI Mutual Fund and treasury gains, helped drive an earnings beat during the quarter.

Emkay said SBI has raised the upper end of its FY26 credit growth guidance to 13–15%, supported by an improved loan-deposit ratio and the full impact of the CRR cut. The brokerage raised earnings estimates for FY26–28 and retained a BUY rating, increasing its target price to ₹1,225.

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