6 Global Brokerages Weigh In on Q2 Earnings With Big Targets Up to ₹1,325
State Bank of India (SBI) has captured the spotlight across institutional trading desks after the nation’s largest public sector lender delivered a resilient second-quarter performance, prompting six premier global and domestic brokerage houses to issue fresh research assessments on the banking giant. Market sentiment around the state-run lender remains distinctly constructive, with four heavyweight institutions—Macquarie, CLSA, HSBC, and Citi—maintaining high-conviction Buy or Outperform recommendations, while Bernstein and Nomura adopted a more calibrated stance by issuing neutral ratings. Significantly, not a single major brokerage advised a Sell on the counter. Analysts across the board pointed to healthy net interest margins (NIM), resilient domestic interest income, and well-managed credit costs as primary structural strengths, even as elevated operating overheads, softer non-interest revenues, and a moderation in fresh credit disbursement velocities emerged as key monitorables.
Bullish Front: CLSA, Citi, Macquarie and HSBC Project Stock Targets Up to ₹1,325
Leading the optimistic camp, CLSA maintained an Outperform rating with the Street-high target price of ₹1,325 per share, highlighting that the bank's net interest income surpassed consensus estimates by 2 percent, driven by a solid expansion in domestic margins and a robust 12 percent year-on-year growth in deposits. While lower non-interest fee income and treasury markdowns on government bonds caused profit before tax to trail expectations by 3 percent, CLSA underscored that fresh non-performing asset (NPA) additions declined significantly and incoming regulatory adjustments around bancassurance sales would have minimal earnings fallout. In tandem, Citi reiterated its Buy call with a ₹1,300 target price, cheering a 14 percent year-on-year surge in net profit to approximately ₹23,000 crore, bolstered by a ₹7,290 crore one-off divestment gain from SBI Funds. Citi highlighted that despite broad expectations of margin contraction, SBI's margins expanded by 8 basis points, supported by the fact that nearly 49 percent of its loan book is linked to external benchmark lending rates (EBLR), providing strong yield protection while management reaffirmed its 14 to 15 percent credit growth guidance for FY2027.
Meanwhile, Macquarie affirmed its Outperform rating on SBI with a target price of ₹1,220, noting that underlying loan disbursements remained stable, asset quality trends remained entirely benign, and the impending regulatory transition toward expected credit loss (ECL) provisioning models would prove comfortably manageable against the bank's capital buffers. HSBC also retained its Buy rating with an identical target price of ₹1,220, raising its FY2027 to FY2029 earnings projections by 4 to 8 percent on the back of resilient spreads and progressive operating expenditure efficiencies, even as it slightly recalibrated its final target multiple to reflect near-term credit pacing and revised subsidiary valuations.
Measured Stance: Bernstein and Nomura Scrutinize One-Off Gains and Operating Overheads
Striking a more cautious, data-dependent posture, Bernstein assigned a Market Perform rating with a target price of ₹1,300, signaling expectations of market-matching performance in the near term. The brokerage observed that reported bottom-line expansion was heavily reliant on softened funding costs and the exceptional gain from the SBI Funds stake monetization, pointing out that when stripping out one-time gains, SBI's underlying earnings per share grew by just 5 percent due to rising operating costs and softer treasury returns. Echoing this measured outlook, Nomura maintained a Neutral recommendation with a conservative target price of ₹1,100 per share. Nomura noted that while core interest earnings beat forecasts courtesy of margin resilience, core operating profitability was dampened by elevated administrative expenditures and sluggish fee traction. However, Nomura emphasized that SBI's balance sheet fundamentals remain solid, with management firmly on track to deliver 14 to 15 percent loan growth through FY2027 alongside a very healthy bad loan resolution track record.
