{"id":11788,"date":"2026-05-11T10:33:14","date_gmt":"2026-05-11T10:33:14","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?p=11788"},"modified":"2026-05-11T10:33:17","modified_gmt":"2026-05-11T10:33:17","slug":"sbi-share-price-falls-on-q4-miss","status":"publish","type":"post","link":"https:\/\/lemonn.co.in\/blog\/market-updates\/sbi-share-price-falls-on-q4-miss\/","title":{"rendered":"SBI share price plunges 11% after Q4 margin miss and downgrades"},"content":{"rendered":"
\"SBI<\/figure>\n\n\n

State Bank of India (SBI)<\/strong> shares fell about 11% in two sessions<\/strong> to a four\u2011month low near \u20b9975<\/strong> by Monday, as investors reacted to weaker\u2011than\u2011expected March quarter margins and core income despite a 5.6% year\u2011on\u2011year rise in net profit to about \u20b919,684 crore<\/strong>. The selloff, which began after the Q4 FY26 results were released on Friday, wiped out roughly \u20b91.1 lakh crore<\/strong> in market capitalisation and triggered a wave of earnings downgrades, though brokerages largely retained positive or neutral ratings.<\/p>\n\n\n\n

Market overview and price damage<\/h2>\n\n\n\n
Statistic<\/strong><\/td>Value\/Change<\/strong><\/td>Context<\/strong><\/td><\/tr>
Latest close<\/strong><\/td>~\u20b9975 per share<\/td>Four\u2011month low after post\u2011results selloff<\/td><\/tr>
Two\u2011day move<\/strong><\/td>Down about 11%<\/td>Reaction to Q4 FY26 earnings miss<\/td><\/tr>
Friday move<\/strong><\/td>Near 7% intraday\/close loss<\/td>Results were announced during market hours<\/td><\/tr>
Monday move<\/strong><\/td>About 4.5% intraday decline<\/td>Selling extended for a second session<\/td><\/tr>
Market cap<\/strong><\/td>About \u20b99 lakh crore<\/td>Down roughly \u20b91.11 lakh crore in two days<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
    \n
  • SBI weekly return slipped about 4.6%<\/strong>, with one\u2011month return down around 8%<\/strong>.<\/li>\n\n\n\n
  • Three\u2011month return turned negative at about 17.5%<\/strong>, per live price data.<\/li>\n\n\n\n
  • Despite the correction, one\u2011year return remained near 26%<\/strong>, and five\u2011year return about 169%<\/strong>.<\/li>\n\n\n\n
  • Trading volume on Monday surged to about 4.8 crore shares<\/strong>, well above the recent seven\u2011day average.<\/li>\n<\/ul>\n\n\n\n

    What in Q4 FY26 spooked investors<\/h2>\n\n\n\n
    Metric<\/strong><\/td>Q4 FY26<\/strong><\/td>YoY \/ QoQ change<\/strong><\/td>Notes<\/strong><\/td><\/tr>
    Standalone net profit<\/strong><\/td>\u20b919,683.75 crore<\/td>Up 5.6% YoY, down 6.4% QoQ<\/td>Profit still grew YoY<\/td><\/tr>
    Operating profit<\/strong><\/td>\u20b927,704 crore<\/td>Down 11.45% YoY, 15.70% QoQ<\/td>Core operating performance weakened<\/td><\/tr>
    Net interest income (NII)<\/strong><\/td>\u20b944,380 crore<\/td>Up ~4% YoY, down 1.35% QoQ<\/td>Growth lagged loan growth<\/td><\/tr>
    Whole\u2011bank NIM<\/strong><\/td>2.81%<\/td>Down 18 bps QoQ<\/td>Below Street expectations<\/td><\/tr>
    Domestic NIM (Q4)<\/strong><\/td>2.93%<\/td>Down 21 bps YoY, 18 bps QoQ<\/td>Key driver of disappointment<\/td><\/tr>
    Domestic NIM (FY26)<\/strong><\/td>3.03%<\/td>Management guide above 3%<\/td>Focus on FY27 trend<\/td><\/tr>
    Provisions (total)<\/strong><\/td>~\u20b92,872 crore<\/td>Down sharply YoY<\/td>Supported bottom line<\/td><\/tr>
    Gross NPA ratio<\/strong><\/td>1.49%<\/td>Improved YoY<\/td>Asset quality strengthened<\/td><\/tr>
    Net NPA ratio<\/strong><\/td>0.39%<\/td>Stable and low<\/td>Credit costs under control<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
      \n
    • NII growth of about 4% YoY<\/strong> was modest versus roughly 17%<\/strong> loan growth cited by some brokerages.<\/li>\n\n\n\n
    • Margin compression stemmed from repo rate transmission, MCLR cuts and migration of some corporate loans to T\u2011bill\u2011linked rates.<\/li>\n\n\n\n
    • Treasury profits weakened due to a spike in bond yields, adding to pressure on operating profit.<\/li>\n\n\n\n
    • Slippages rose sequentially, largely seasonal and agriculture\u2011linked, but still weighed on sentiment.<\/li>\n<\/ul>\n\n\n\n

      Why margins and yields are under pressure<\/h2>\n\n\n\n
        \n
      • Around half of SBI\u2019s loan book is linked to external benchmark lending rates, which reset after the RBI\u2019s 25 bps repo cut in December.<\/li>\n\n\n\n
      • MCLR reductions and higher share of T\u2011bill\u2011linked corporate loans lowered yields on advances.<\/li>\n\n\n\n
      • One brokerage noted NIM excluding an IT refund fell 18 bps QoQ<\/strong> and was 16 bps<\/strong> below its estimate.<\/li>\n\n\n\n
      • Management reiterated guidance of domestic NIM above 3%<\/strong> and 13\u201315% loan growth<\/strong> for FY27.<\/li>\n\n\n\n
      • Return on assets slipped to about 1.07%<\/strong>, partly due to NIM compression and treasury mark\u2011to\u2011market losses.<\/li>\n<\/ul>\n\n\n\n

        Broker reactions and rating changes<\/h2>\n\n\n\n
        Broker<\/strong><\/td>Rating action<\/strong><\/td>Target price<\/strong><\/td>Key rationale<\/strong><\/td><\/tr>
        Nomura<\/strong><\/td>Cut to Neutral from Buy<\/td>\u20b91,140<\/td>Sees higher sustainable credit costs under new ECL norms, RoE sustainability risk<\/td><\/tr>
        IIFL<\/strong><\/td>Cut to Add from Buy<\/td>\u20b91,140<\/td>Lower NII, EPS CAGR cut to 7% for FY26\u201128, higher credit cost assumptions<\/td><\/tr>
        Morgan Stanley<\/strong><\/td>Equal\u2011weight, TP cut<\/td>\u20b9980<\/td>NIM miss, yields hit by T\u2011bill\u2011linked loans, NIM and EPS forecasts trimmed<\/td><\/tr>
        Citigroup<\/strong><\/td>Buy, TP trimmed<\/td>\u20b91,230<\/td>NIM compression and weaker fee income; credit costs contained<\/td><\/tr>
        Bernstein<\/strong><\/td>Outperform, TP retained<\/td>\u20b91,300<\/td>Strong loan growth, stable asset quality, CET1 improving despite margin pressure<\/td><\/tr>
        Motilal Oswal<\/strong><\/td>Buy, TP retained<\/td>\u20b91,300<\/td>Mixed quarter; expects NIM above 3% with corrective measures<\/td><\/tr>
        Macquarie<\/strong><\/td>Buy<\/td>\u20b91,150<\/td>Asset quality a bright spot; RoE expected near 15%<\/td><\/tr>
        JPMorgan<\/strong><\/td>Overweight<\/td>\u20b91,225<\/td>Benign asset quality, seasonal slippages; core income miss acknowledged<\/td><\/tr>
        UBS<\/strong><\/td>Neutral<\/td>\u20b91,080<\/td>Expects RoA near 0.95% in FY27\u201128; risk\u2011reward seen as fair<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
          \n
        • Around 50 analysts<\/strong> cover SBI, with 43 Buy<\/strong> and the rest Hold or equivalent; no Sell ratings reported.<\/li>\n\n\n\n
        • One brokerage highlighted SBI trades near 1.2 times FY28E book value<\/strong>, limiting scope for re\u2011rating at current multiples.<\/li>\n\n\n\n
        • Another estimated the stock at about 1.6 times FY27 price\u2011to\u2011book<\/strong>, calling this comfortable given expected RoE.<\/li>\n\n\n\n
        • Some houses cut FY27\u201328 NIM forecasts by over 20 bps<\/strong> and EPS estimates by 2\u20135%<\/strong>.<\/li>\n\n\n\n
        • “SBI\u2019s 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.” \u2014 JM Financial (brokerage comment).<\/li>\n<\/ul>\n\n\n\n

          Technical and trading signals<\/h2>\n\n\n\n
          Statistic<\/strong><\/td>Value\/Change<\/strong><\/td>Context<\/strong><\/td><\/tr>
          Last traded price<\/strong><\/td>\u20b9973.6\u2013\u20b9975<\/td>As of late trade Monday<\/td><\/tr>
          P\/E ratio<\/strong><\/td>10.76<\/td>Based on trailing EPS of \u20b990.24<\/td><\/tr>
          3\u2011day SMA<\/strong><\/td>\u20b91,069.10<\/td>Price now well below short\u2011term average<\/td><\/tr>
          5\u2011day EMA<\/strong><\/td>\u20b91,068.05<\/td>Indicates short\u2011term bearish trend<\/td><\/tr>
          Six\u2011month beta<\/strong><\/td>1.6862<\/td>Higher volatility than broader market<\/td><\/tr>
          One\u2011month return<\/strong><\/td>Down about 8\u201310%<\/td>Reflects recent correction<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
            \n
          • Price is trading significantly below short\u2011term moving averages, signalling near\u2011term technical weakness.<\/li>\n\n\n\n
          • Elevated beta suggests sharper price swings relative to the benchmark indices.<\/li>\n\n\n\n
          • Volume spike during the decline points to strong institutional and retail participation in the selloff.<\/li>\n<\/ul>\n\n\n\n

            What could drive SBI share price next<\/h2>\n\n\n\n
              \n
            • Margin trajectory: whether domestic NIM can revert and sustain above 3%<\/strong> as guided.<\/li>\n\n\n\n
            • Credit costs: impact of transition to expected credit loss norms on RoA and RoE.<\/li>\n\n\n\n
            • Treasury performance: bond yield movements and scope for treasury gains or further mark\u2011to\u2011market hits.<\/li>\n\n\n\n
            • Loan mix: pace of growth in SME, agriculture and corporate segments versus lower\u2011yield portfolios.<\/li>\n\n\n\n
            • Valuation: with the stock de\u2011rating after the fall, future moves may track delivery on FY27 profitability guidance.<\/li>\n<\/ul>\n\n\n\n

              FAQs<\/h2>\n\n\n
              \n
              \n
              \n

              Q: Why is the SBI share price falling despite profit growth in Q4 FY26?<\/strong><\/h3>\n
              \n\n

              NIM and NII missed expectations, operating profit fell double\u2011digit, and margins compressed due to rate transmission and loan repricing. Brokerages cut earnings and NIM forecasts, triggering a valuation reset despite YoY profit growth.<\/p>\n\n<\/div>\n<\/div>\n

              \n

              Q: How serious is the asset quality situation at SBI after Q4 FY26?<\/strong><\/h3>\n
              \n\n

              Gross NPA ratio improved to 1.49%<\/strong> and net NPA stayed low at 0.39%<\/strong>. Slippages rose sequentially but were described as seasonal and largely agriculture\u2011led, with credit costs remaining contained.<\/p>\n\n<\/div>\n<\/div>\n

              \n

              Q: Are analysts turning negative on SBI after the results?<\/strong><\/h3>\n
              \n\n

              Two major houses downgraded to Neutral\/Add from Buy and several cut target prices, but none of the roughly 50<\/strong> covering analysts reportedly has a Sell rating. Most still expect RoA near or above 1%<\/strong> and RoE in mid\u2011teens, contingent on margin recovery.<\/p>\n\n<\/div>\n<\/div>\n

              \n

              Q: Why did SBI shares drop 11% in two sessions after Q4 FY26?<\/strong><\/h3>\n
              \n\n

              The decline followed weaker\u2011than\u2011expected Q4 margins and core income, double\u2011digit operating profit contraction, and a series of earnings and target price cuts from brokerages, even though net profit still grew year\u2011on\u2011year.<\/p>\n\n<\/div>\n<\/div>\n

              \n

              Q: What is the key concern for SBI investors after the March quarter results?<\/strong><\/h3>\n
              \n\n

              The main concern is sustained net interest margin pressure from repo rate transmission, MCLR cuts and migration to T\u2011bill\u2011linked loans, which could cap RoA and RoE despite healthy loan growth and benign asset quality.<\/p>\n\n<\/div>\n<\/div>\n

              \n

              Q: Did brokerages issue any Sell ratings on SBI after the results miss?<\/strong><\/h3>\n
              \n\n

              No Sell ratings were reported; about 43 analysts still rate SBI a Buy and the rest Hold or equivalent, though several firms downgraded from Buy to Neutral\/Add and trimmed NIM and EPS estimates along with target prices.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

              State Bank of India (SBI) shares fell about 11% in two sessions to a four\u2011month low near \u20b9975 by Monday, as investors reacted to weaker\u2011than\u2011expected March quarter margins and core income despite a 5.6% year\u2011on\u2011year rise in net profit to about \u20b919,684 crore. The selloff, which began after the Q4 FY26 results were released on […]<\/p>\n","protected":false},"author":3,"featured_media":11786,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_ayudawp_aiss_exclude":false,"footnotes":""},"categories":[512],"tags":[],"class_list":["post-11788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-updates"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/11788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/comments?post=11788"}],"version-history":[{"count":1,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/11788\/revisions"}],"predecessor-version":[{"id":11789,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/11788\/revisions\/11789"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media\/11786"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=11788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/categories?post=11788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/tags?post=11788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}