SBIN

’s Scale No Longer a Constraint, Rally May Continue

reported its highest-ever quarterly profit of ₹21,028 crore in Q3FY26, up 24% YoY, driven by strong loan growth, margin expansion, fee income recovery, and low credit costs. Treasury gains and a one-time dividend from SBI Mutual Fund further boosted earnings. With advances growing at double digits across segments and asset quality at multi-decade lows, SBI’s earnings trajectory remains robust, supporting potential valuation re-rating. Financial Performance - Net profit: ₹21,028 crore, +24% YoY. - Advances: ₹46.83 lakh crore, +15% YoY. - SME loans: +21% YoY. - Retail loans: +15% YoY (mortgages +15%). - Corporate loans: +13% YoY. - Xpress Credit (unsecured): +6% YoY. - Deposits: +9% YoY, lagging loan growth. - Domestic NIM: 3.12%, +3 bps QoQ. - Fee income: +16% YoY, broad-based recovery across loan processing, government business, insurance, and mutual funds. - Operating expenses: +6% YoY; cost-to-income ratio improved to 48%. - Exceptional provision: ₹16 crore for labour code alignment. Asset Quality & Credit Costs - NPAs at lowest level in over two decades. - Credit costs remain well below historical averages. - Excess provisions provide cushion for future cycles. Strategic Outlook - FY26 credit growth guidance raised to 13–15%. - Corporate pipeline healthy; unsecured lending recovery expected. - Credit-to-deposit ratio: 72.98%, still below peers, offering headroom. - Equity infusion of ₹25,000 crore via QIP supports growth. - YONO expansion: user base targeted to double from 10 crore to 20 crore in 2–3 years, driving operating leverage. Valuation & Investor View - Stock trades at 1.3x FY27E core book and 1.1x FY28E, above historical average of 0.9–1.0x. - ROA sustainable at ~1%, ROE at 21% (9M FY26). - Valuation still attractive given earnings visibility and potential re-rating.