SBI share price plunges 11% after Q4 margin miss and downgrades

State Bank of India (SBI) shares fell about 11% in two sessions to a four‑month low near ₹975 by Monday, as investors reacted to weaker‑than‑expected March quarter margins and core income despite a 5.6% year‑on‑year rise in net profit to about ₹19,684 crore. The selloff, which began after the Q4 FY26 results were released on Friday, wiped out roughly ₹1.1 lakh crore in market capitalisation and triggered a wave of earnings downgrades, though brokerages largely retained positive or neutral ratings.

Market overview and price damage

Statistic	Value/Change	Context
Latest close	~₹975 per share	Four‑month low after post‑results selloff
Two‑day move	Down about 11%	Reaction to Q4 FY26 earnings miss
Friday move	Near 7% intraday/close loss	Results were announced during market hours
Monday move	About 4.5% intraday decline	Selling extended for a second session
Market cap	About ₹9 lakh crore	Down roughly ₹1.11 lakh crore in two days

• SBI weekly return slipped about 4.6%, with one‑month return down around 8%.
• Three‑month return turned negative at about 17.5%, per live price data.
• Despite the correction, one‑year return remained near 26%, and five‑year return about 169%.
• Trading volume on Monday surged to about 4.8 crore shares, well above the recent seven‑day average.

What in Q4 FY26 spooked investors

Metric	Q4 FY26	YoY / QoQ change	Notes
Standalone net profit	₹19,683.75 crore	Up 5.6% YoY, down 6.4% QoQ	Profit still grew YoY
Operating profit	₹27,704 crore	Down 11.45% YoY, 15.70% QoQ	Core operating performance weakened
Net interest income (NII)	₹44,380 crore	Up ~4% YoY, down 1.35% QoQ	Growth lagged loan growth
Whole‑bank NIM	2.81%	Down 18 bps QoQ	Below Street expectations
Domestic NIM (Q4)	2.93%	Down 21 bps YoY, 18 bps QoQ	Key driver of disappointment
Domestic NIM (FY26)	3.03%	Management guide above 3%	Focus on FY27 trend
Provisions (total)	~₹2,872 crore	Down sharply YoY	Supported bottom line
Gross NPA ratio	1.49%	Improved YoY	Asset quality strengthened
Net NPA ratio	0.39%	Stable and low	Credit costs under control

• NII growth of about 4% YoY was modest versus roughly 17% loan growth cited by some brokerages.
• Margin compression stemmed from repo rate transmission, MCLR cuts and migration of some corporate loans to T‑bill‑linked rates.
• Treasury profits weakened due to a spike in bond yields, adding to pressure on operating profit.
• Slippages rose sequentially, largely seasonal and agriculture‑linked, but still weighed on sentiment.

Why margins and yields are under pressure

• Around half of SBI’s loan book is linked to external benchmark lending rates, which reset after the RBI’s 25 bps repo cut in December.
• MCLR reductions and higher share of T‑bill‑linked corporate loans lowered yields on advances.
• One brokerage noted NIM excluding an IT refund fell 18 bps QoQ and was 16 bps below its estimate.
• Management reiterated guidance of domestic NIM above 3% and 13–15% loan growth for FY27.
• Return on assets slipped to about 1.07%, partly due to NIM compression and treasury mark‑to‑market losses.

Broker reactions and rating changes

Broker	Rating action	Target price	Key rationale
Nomura	Cut to Neutral from Buy	₹1,140	Sees higher sustainable credit costs under new ECL norms, RoE sustainability risk
IIFL	Cut to Add from Buy	₹1,140	Lower NII, EPS CAGR cut to 7% for FY26‑28, higher credit cost assumptions
Morgan Stanley	Equal‑weight, TP cut	₹980	NIM miss, yields hit by T‑bill‑linked loans, NIM and EPS forecasts trimmed
Citigroup	Buy, TP trimmed	₹1,230	NIM compression and weaker fee income; credit costs contained
Bernstein	Outperform, TP retained	₹1,300	Strong loan growth, stable asset quality, CET1 improving despite margin pressure
Motilal Oswal	Buy, TP retained	₹1,300	Mixed quarter; expects NIM above 3% with corrective measures
Macquarie	Buy	₹1,150	Asset quality a bright spot; RoE expected near 15%
JPMorgan	Overweight	₹1,225	Benign asset quality, seasonal slippages; core income miss acknowledged
UBS	Neutral	₹1,080	Expects RoA near 0.95% in FY27‑28; risk‑reward seen as fair

• Around 50 analysts cover SBI, with 43 Buy and the rest Hold or equivalent; no Sell ratings reported.
• One brokerage highlighted SBI trades near 1.2 times FY28E book value, limiting scope for re‑rating at current multiples.
• Another estimated the stock at about 1.6 times FY27 price‑to‑book, calling this comfortable given expected RoE.
• Some houses cut FY27–28 NIM forecasts by over 20 bps and EPS estimates by 2–5%.
• “SBI’s core fundamentals are stable, and delivery on growth along with controlled credit costs should support return ratios sustaining above 1%. However, we believe these outcomes will be overshadowed by the NIM/NII performance in FY27E.” — JM Financial (brokerage comment).

Technical and trading signals

Statistic	Value/Change	Context
Last traded price	₹973.6–₹975	As of late trade Monday
P/E ratio	10.76	Based on trailing EPS of ₹90.24
3‑day SMA	₹1,069.10	Price now well below short‑term average
5‑day EMA	₹1,068.05	Indicates short‑term bearish trend
Six‑month beta	1.6862	Higher volatility than broader market
One‑month return	Down about 8–10%	Reflects recent correction

• Price is trading significantly below short‑term moving averages, signalling near‑term technical weakness.
• Elevated beta suggests sharper price swings relative to the benchmark indices.
• Volume spike during the decline points to strong institutional and retail participation in the selloff.

What could drive SBI share price next

• Margin trajectory: whether domestic NIM can revert and sustain above 3% as guided.
• Credit costs: impact of transition to expected credit loss norms on RoA and RoE.
• Treasury performance: bond yield movements and scope for treasury gains or further mark‑to‑market hits.
• Loan mix: pace of growth in SME, agriculture and corporate segments versus lower‑yield portfolios.
• Valuation: with the stock de‑rating after the fall, future moves may track delivery on FY27 profitability guidance.

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