SBI Stock Surges After Record Q3 Profit

Shares of State Bank of India (SBI) climbed sharply on February 9, hitting a new record high after the lender posted its best-ever quarterly profit. The stock rose nearly 7% in morning trade and touched ₹1,137 as investors reacted to the bank’s stronger-than-expected December quarter results.

The rally followed SBI’s Q3 FY26 earnings announcement on February 7, which showed steady growth across core banking operations along with a visible improvement in asset quality. Several brokerages responded by raising their target prices on the stock.

What Stood Out In SBI’s Q3 Results?

For the October–December quarter, SBI reported a standalone net profit of ₹21,028 crore, up 24.5% from the same period last year. This marks the highest quarterly profit reported by the bank so far.

The bank reported a 9% increase in its net interest income (NII) to ₹45,190 crore. The increase is due to consistent loan growth in retail, corporate, agriculture, and small and medium-sized enterprise (SME) segments. Furthermore, operating performance remained strong with expenses under control and stable margins.

A one-time income boost also supported profitability. SBI received a ₹2,200 crore special dividend from SBI Asset Management Company, which is preparing for a public listing. Interest income from tax refunds further added to the quarter’s earnings.

How Much Has Asset Quality Improved?

Asset quality was one of the most closely watched parts of the results, and the numbers offered comfort. Gross non-performing assets (NPA) declined sequentially to ₹73,636.8 crore, while net NPAs eased to ₹18,012 crore.

The gross NPA ratio improved to 1.57% from 1.73% in the previous quarter. The net NPA ratio also fell to 0.39% from 0.42%. These levels are among the best SBI has reported in nearly two decades.

Provisioning during the quarter stood at ₹4,506 crore, lower than both the previous quarter and the year-ago period. This suggests that credit costs remain under control despite steady loan expansion.

Why Are Brokerages Raising Target Prices?

Brokerages across the board struck an optimistic tone after the results. Nomura said SBI delivered a strong all-round performance, helped by better margins, controlled costs, and broad-based loan growth. CLSA highlighted that core operating profit and profit before tax exceeded estimates, while slippages and credit costs were lower than expected.

Citi noted that the bank’s core earnings came in ahead of forecasts and said margins are likely to stay at or above 3% in the near term. Jefferies pointed out that SBI’s NII growth was among the strongest in the sector and raised its target price.

What Is SBI’s Outlook From Here?

SBI’s management has raised its loan growth guidance for FY26 to 13–15%, citing improving corporate demand and sustained momentum in retail lending. With a comfortable credit-deposit ratio and improving balance sheet strength, the bank believes it has room to grow without taking excessive risk.

For investors, the message from the Street is clear. SBI’s recent rally is being driven by earnings strength and improving fundamentals rather than short-term sentiment.

Sources

Moneycontrol