SBI shares pare early gains; Jefferies, Morgan Stanlay and other analysts decode Q1 earnings

However, the stock lost momentum later and slipped 2% to touch an intraday low of ₹1,075 apiece.

The country’s largest bank reported a net profit of ₹21,121 crore in the first quarter of the current financial year, marking an increase of 10% from ₹19,160 crore in the same period last year.

The bank's net interest income (NII), or the difference between interest earned on loans and expended on deposits, rose 12% to ₹46,992 crore in the April-June period compared with ₹41,907 crore in the year-ago period.

The domestic net interest margin (NIM) for Q1 FY27 stood at 3%, improving 7 bps sequentially. The whole bank's NIM was at 2.86% in Q1FY27, improved by 5 bps quarter-on-quarter (QoQ).

Furthermore, SBI reported an improvement in asset quality with non-performing asset (NPA) ratios hitting the lowest in over two decades for the quarter ended June 30, 2026.

The bank registered a gross NPA ratio declining by 36 basis points year-on-year (YoY) to 1.47%. The net NPA ratio also improved by 9 basis points annually to 0.38%. This was the lowest NPA ratio the bank registered in more than two decades, it said in the investors’ presentation.

The bank’s provision coverage ratio (PCR) stood at 74.20%, while PCR including AUCA was reported at 91.82%, indicating the extent of provisioning against stressed assets.

Here’s what analysts said on SBI Q1 results

Jefferies

Jefferies said SBI’s Q1 profit came in at ₹21,100 crore, ahead of estimates, supported by higher NII, treasury gains and lower operating expenses. The firm noted that a rebound in domestic NIM drove NII growth of 15% YoY, the highest among large banks.

It added that asset quality remains robust with low credit costs. Jefferies also highlighted that SBI is investing in a collections platform to expand into self-employed lending segments, which could support growth in FY28–29, and raised its core earnings estimates by 2–4%.

Nomura

Nomura said Q1 earnings saw a positive surprise on margins, with net interest margins exceeding expectations and supporting strong pre-provision operating profit (PPOP) driven by robust net interest income. The analysts noted that loan growth remained healthy while deposit growth lagged, though asset quality stayed resilient, leading the firm to maintain a Neutral stance.

UBS

Analysts from UBS highlighted that SBI’s NIM improved by 5 basis points quarter-on-quarter to 2.86%, while loan growth remained strong. They added that the valuation at 1.1x FY28E price-to-book value appears fair.

CITI

CITI analysts said SBI’s earnings beat expectations, rising 10% YoY and 7% sequentially, supported growth in NII, treasury gains of ₹4,320 crore and contained operating expenses, which rose 5% YoY but declined 14% QoQ.

They also noted that credit costs at 41 bps were marginally above estimates, reflecting deliberate front-loading of PLI provisions. CITI analysts added that management is targeting US$10 billion in FCNR(B) deposits with negligible impact on margins, while reiterating guidance of around 3% domestic NIM and 14–15% credit growth for FY27.

Morgan Stanley

Analysts raised forecasts for SBI after reversing part of the sharp cut in NIM estimates following the Q4 FY26 miss, supported by a better outcome in Q1 FY27. They expect margins to remain largely stable from here, while noting recent volatility. The analysts also added that the valuation appears full relative to sustainable returns on assets and equity.

JP Morgan

The analysts said SBI’s loan growth of 19% YoY came in 1% above JP Morgan’s estimates, with the bank raising its growth guidance to 14–15% from 12–14%, indicating confidence in sustained momentum. They also noted that credit costs at 41 bps were slightly lower than their estimate of 42 bps, while management lifted FY27 guidance to 14–15% from 13–15%.

According to NSE data, the lender has a market capitalisation of ₹10.05 lakh crore.