Shares of State Bank of India (SBI) slipped 2 percent to Rs 784 per share on May 5, following the announcement of its mixed March quarter results. While most brokerage firms continue to maintain a bullish outlook on the stock, several have lowered their earnings estimates for FY26 and FY27.

Analysts at Motilal Oswal have reiterated their “buy” rating on the stock, maintaining a target price of Rs 915 per share. However, they have reduced their earnings projections for FY26 and FY27 by 4.6 percent and 5 percent, respectively, citing higher provisioning levels and ongoing margin pressures.

The brokerage noted, “Earnings were in line with expectations, with treasury gains cushioning the impact of elevated operating expenses and provisions. The bank has guided for loan growth of 12–13 percent, and asset quality ratios have shown improvement. However, an expected reduction in the repo rate is likely to exert pressure on margins going forward. We forecast Return on Assets (RoA) and Return on Equity (RoE) for FY27 at 1 percent and 16.1 percent, respectively.”

Nuvama Institutional Equities also maintained a “buy” rating, assigning a higher target price of Rs 950 per share. The firm stated that SBI’s performance, driven by stronger-than-industry loan growth and consistent asset quality continues to support a positive outlook.

“Margins found some relief after two consecutive quarters of decline. Among peers, SBI recorded the highest sequential loan growth, and margins remained stable after nine months of downward movement,” Nuvama commented.

SBI reported a 9.9 percent year-on-year (YoY) decline in net profit, which stood at Rs 18,643 crore for Q4FY25. This drop was mainly due to the absence of a one-time provision write-back that had bolstered earnings in the same quarter of the previous fiscal year, along with a rise in provisions. However, robust trading and foreign exchange income helped support overall profitability. On a sequential basis, net profit rose by 10.4 percent, up from Rs 16,891 crore in Q3FY25.

Net Interest Income (NII) for the quarter rose 2.69 percent YoY to Rs 42,775 crore, and increased 3.21 percent compared to the previous quarter.

Meanwhile, the bank’s domestic Net Interest Margin (NIM) fell by 32 basis points YoY to 3.15 percent in Q4FY25, down from 3.47 percent in the same period last year.

Discussing the outlook post-results, SBI Chairman C.S. Setty stated, “Given the current benign interest rate environment, we anticipate further rate cuts—possibly another 50 basis points in total, with 25 basis points in the next policy announcement. This will undoubtedly put pressure on margins. Some parts of our lending portfolio get re-priced immediately with a rate cut, but deposit re-pricing tends to lag, typically taking 12 to 18 months for the existing deposit stock to adjust.”