SBI's BLOCKBUSTER Quarter! ICICI Securities Reveals Massive Profit Jump & Surprising NEW Target Price!

State Bank of India (SBI) has announced an impressive Q2FY26 financial performance, reporting a Profit After Tax (PAT) of INR 201.6 billion. This strong result was significantly bolstered by the sale of its stake in Yes Bank and complemented by excellent core business growth.

Loan Growth: SBI's loans grew by a healthy 13% year-on-year and 4% quarter-on-quarter, outpacing the industry average. This growth was broad-based, with the SME segment expanding over 15% YoY for the eleventh consecutive quarter, and retail and housing loans showing strong gains of 14% and 15% YoY respectively, despite their large existing volumes.

Profitability: Net Interest Margins (NIMs) improved by 7 basis points quarter-on-quarter to 2.97%, attributed to better management of liabilities. Fee income also saw a substantial jump of 25% year-on-year, despite a slight increase in non-staff operating expenses.

Asset Quality: The bank demonstrated stable asset quality, with gross slippages decreasing on both QoQ and YoY bases. Net Non-Performing Assets (NPAs) continued their improving trend, and the Xpress credit segment also showed an improved Gross NPA ratio.

Capital Adequacy: SBI maintains a comfortable Common Equity Tier 1 (CET1) ratio of 11.47%.

Impact: This robust performance and positive outlook have led ICICI Securities to retain its BUY rating on SBI shares and revise its target price upwards to INR 1,150, based on approximately 1.5 times FY27 estimated Book Value Per Share (ABV). This suggests continued confidence in SBI's growth trajectory and profitability, potentially driving investor interest and stock price appreciation.

Difficult Terms: PAT: Profit After Tax, the profit a company has left after deducting all expenses, interest, and taxes. NIM: Net Interest Margin, a measure of profitability for financial institutions, calculated as the difference between interest income and interest paid, divided by the average interest-earning assets. RoA: Return on Assets, a profitability ratio that indicates how profitable a company is in relation to its total assets. YoY: Year-on-Year, a comparison of data from one period to the same period in the previous year. QoQ: Quarter-on-Quarter, a comparison of data from one quarter to the previous quarter. GNPA: Gross Non-Performing Asset, a loan for which the principal or interest payment is overdue for a specified period. NPA: Non-Performing Asset, an asset (like a loan) that is not generating income for the bank. ABV: Adjusted Book Value, a measure of a company's net asset value, often used in financial valuations. CET1: Common Equity Tier 1, the highest quality of regulatory capital for a bank.