SBI share price jumps 5.5% to hit record high as PSU bank reports highest-ever quarterly profit in Q3 - Should you buy?

By Admin

09 Feb, 2026

Introduction
Shares of State Bank of India (SBI) surged 5.5% on Monday, February 9, touching an all-time high of ₹1,125 after the PSU banking giant reported its highest-ever standalone quarterly profit for Q3 FY26. The blockbuster performance has reignited investor interest, but with the stock already up sharply, the key question remains – should you buy at current levels?

Record-Breaking Q3 Performance
SBI posted a standalone net profit of ₹21,028 crore in Q3 FY26, marking a robust 24.5% year-on-year growth compared to ₹16,891.44 crore in the same quarter last year. This is the highest quarterly profit in the bank’s history. The strong showing was driven by steady core income growth, improved asset quality, and a one-time boost from its asset management subsidiary.

The stock’s rally reflects growing investor confidence. SBI has now gained over 65% from its 52-week low of ₹679.65 recorded in March 2025. Over the past year, the stock is up 44%, with gains of 12% in the last three months and 7% in the last month alone.

Key Financial Highlights – Income, Margins and Profitability
SBI’s operating performance remained healthy in Q3 FY26. Total income rose 9.7% year-on-year to ₹1,40,914.65 crore. Net interest income increased 9% to ₹45,190 crore, while operating profit surged 39.54% to ₹32,862 crore, supported by better operating leverage.

Margins were largely stable. Whole-bank net interest margin (NIM) stood at 2.99%, while domestic NIM slipped marginally by 3 basis points to 3.12%, still reflecting a resilient lending environment.

Asset Quality Shows Best Levels in Two Decades
Asset quality continued to improve meaningfully. Gross NPAs declined 12.71% year-on-year to ₹73,637 crore, while net NPAs fell 15.74% to ₹18,012 crore. The GNPA ratio improved to 1.57% as of December 31, 2025, compared with 1.73% in September, marking the best level seen in nearly 20 years.

Provisions rose to ₹4,507 crore from ₹911 crore a year ago, even as fresh slippages increased modestly to ₹4,458 crore. On a consolidated basis, SBI reported a net profit of ₹21,876.04 crore, up 14.08% year-on-year.

One-Time Boost from SBI Mutual Fund Dividend
A major contributor to the record profit was a ₹2,200 crore special dividend received from SBI Mutual Fund. The asset management arm is preparing for an IPO, and Chairman C S Setty highlighted this special dividend as one of the key reasons behind the sharp rise in profitability, helping SBI deliver a 24% jump in quarterly earnings.

Management Commentary – Loan Growth Guidance Raised
Commenting on the outlook, Chairman C S Setty raised SBI’s loan growth guidance for FY26 to 13%–15%, up from 12%–14%, citing a revival in corporate lending and sustained momentum in retail credit. As of December 31, SBI’s total loan book stood at ₹46.8 trillion, while deposits grew 9.02% year-on-year. The credit-deposit ratio remained comfortable at 72%, providing headroom for future growth.

Management, however, cautioned that geopolitical tensions, global trade uncertainty, commodity price volatility and market fluctuations remain key risks going forward.

Brokerage View – Should You Buy SBI Stock?
Brokerage house Motilal Oswal said SBI delivered a strong all-round performance in Q3, driven by robust business growth, margin expansion and healthy asset quality. The brokerage expects NIMs to sustain at 3%+ in FY26 and over the long term, supported by fee-based income. Motilal Oswal raised earnings estimates for FY27E and FY28E and reiterated a BUY rating with a revised target price of ₹1,300.

Seema Srivastava, Senior Research Analyst at SMC Global Securities, echoed similar optimism. She highlighted SBI’s strong operating leverage, disciplined cost control, improving asset quality, and comfortable capital adequacy as key factors reinforcing confidence in the bank’s earnings stability and balance-sheet strength.

Conclusion
SBI’s record Q3 performance, improving asset quality, healthy credit growth outlook, and positive brokerage commentary underline the bank’s strong fundamentals. While the stock has already rallied sharply, analysts remain constructive on its medium- to long-term prospects. Investors, however, should consider valuations and consult certified financial advisors before making any investment decisions.

Disclaimer
The views and recommendations mentioned above are those of individual analysts or broking companies and are not investment advice. Investors are advised to consult certified experts before taking any investment decisions.