State Bank of India (SBI) shares extended their losing streak to a fourth consecutive session, with the public sector lender's market capitalization nosediving by over ₹1 lakh crore in just three trading days. This sharp decline has dragged SBI's market cap down to ₹8.91 lakh crore from over ₹10 lakh crore recorded on May 7. The stock plunged approximately 11% over the last three sessions alone.
Q4 Earnings Miss Leads to Investor Concern
The significant erosion in shareholder wealth comes on the heels of SBI's fourth-quarter earnings announcement last Friday. The state-run lender's results fell short of Street expectations, primarily due to a decline in net interest margins (NIMs). HDFC Securities pointed out that SBI's earnings missed estimates, citing a 4 basis points quarter-on-quarter drop in margins. Similarly, PL Capital highlighted that the quarter was soft, impacted by lower loan yields that affected Net Interest Income (NII) and NIMs.
Analysts Maintain 'Buy' Ratings, Trim Price Targets
Despite the recent downturn and missed earnings, several brokerages have maintained their positive outlook on SBI. PL Capital reiterated its 'Buy' call on the stock but adjusted its target price downwards to ₹1,200. The firm trimmed its NII projections by an average of 2.8% for FY27/28E and cut core Profit After Tax (PAT) by an average of 4%.
Echoing this sentiment, HDFC Securities also maintained its 'Buy' rating for the PSU banking giant. However, the brokerage revised its share price target to ₹1,195 per share, down from its previous target of ₹2,000. HDFC Securities expressed confidence that SBI is likely to build on its productivity and efficiency gains, coupled with stable asset quality, which will drive sustainable Return on Assets (RoAs) at 1.1%.