Written by State Bank of India (SBI), the country’s largest lender, posted a 12.48% year-on-year (YoY) rise in standalone net profit to ₹19,160 crore for the first quarter of FY26, surpassing market estimates. The growth was primarily driven by a healthy increase in operating income and improved asset quality.
Despite the strong financial performance, SBI shares fell by 1% after the earnings announcement, reflecting investor concerns over continued pressure on net interest margins (NIMs). The bank has been facing compression in NIMs, a key profitability indicator, amid evolving macroeconomic conditions.
In a positive development, global brokerage firm HSBC upgraded SBI’s rating to ‘Buy,’ projecting an 18% upside potential from current levels. Analysts at HSBC highlighted SBI’s robust loan growth and the bank’s ability to shield its margins through better NIM protection, which are expected to support stable earnings in the upcoming quarters.
“While NIM compression remains a concern across the sector, SBI’s efficient fund deployment and balance sheet strength position it well for sustainable growth,” HSBC noted in its report.
The bank’s improved asset quality and consistent loan book expansion have added to the optimism, especially as public sector banks continue to gain traction in credit growth. Analysts also view SBI’s strategic focus on retail and corporate lending as a key driver for its long-term performance.
SBI’s Q1 results reaffirm its resilience in a challenging interest rate environment, and the recent upgrade from HSBC may renew investor confidence in the stock, despite the near-term market reaction.