State Bank of India posts 15% profit rise, brokers see up to 34% upside

State Bank of India (SBI) posted a 15% year-on-year rise in standalone net profit to Rs 23,038 crore for the second quarter, lifting its shares 2% to Rs 988 on the BSE. The profit growth was driven by a loan book that exceeded Rs 52 lakh crore and a 10% jump in interest income, while operating profit rose 7% to Rs 34,226 crore.

Jefferies kept its Buy rating on SBI, setting a target price of Rs 1,320 per share, which implies a potential upside of about 34% from the current level. The brokerage highlighted the bank’s strong asset quality, noting a gross slippage of 0.5% of loans and a gross non-performing loan ratio of 1.4%.

Motilal Oswal also retained a Buy rating, revising its target to Rs 1,225 per share, indicating roughly 26% upside. It pointed to steady net interest income growth, one-off gains from the sale of its stake in SBI Mutual Fund, and an 8-basis-point expansion in net interest margin.

Emkay Global Financial Services maintained a Buy stance with a Rs 1,350 target, suggesting a 39% upside. The firm cited lower deposit costs, replacement of high-cost wholesale funding, and an improving CASA balance as drivers of margin expansion.

All three brokerages expect SBI’s capital adequacy ratio to stay around 13% and anticipate continued growth in returns on assets and equity through FY2029. However, they flagged macroeconomic slowdown and potential treasury losses as key risks to the outlook.