Bank Stock to Buy Now for an Upside of 32%; Recommended by CLSA

Synopsis: CLSA maintained an Outperform rating on State Bank of India with a ₹1,275 target price, citing attractive valuation, margin recovery potential, and strong long-term growth outlook.

This PSU Bank Stock, engaged in providing banking and financial services, including retail banking, corporate banking, treasury operations, loans, digital banking, and investment services, is in focus after CLSA gave a buy target of Rs. 1,275, which has an upside potential of 32.04 percent.

With a market capitalization of Rs. 8,91,308.43 crore, the shares of State Bank of India were currently trading at Rs. 968.80 per equity share, down nearly 0.21 percent from its previous day’s close price of Rs. 967.65 per share.

What is the News?

CLSA, a prominent brokerage firm, has recommended an “Outperform” call on State Bank of India with a target price of Rs. 1,275 per share, indicating an upside potential of 32.04 percent from its current price of Rs. 965.60 per share. 

State Bank of India continues to remain a preferred pick for CLSA, which has maintained its Outperform rating on the bank. The brokerage believes the recent 10–12 percent correction in the stock price provides an attractive buying opportunity for long-term investors. It highlighted that similar phases of temporary NIM weakness in the past have eventually reversed with improving operating conditions.

CLSA expects deposit repricing benefits to gradually support margins going forward, with NIM likely to improve by around 8 basis points. The brokerage remains positive on SBI’s strong balance sheet, stable loan growth outlook, and ability to navigate near-term pressure, supporting confidence in earnings recovery ahead.

Branch Networks

State Bank of India has one of the largest banking networks in India with 23,265 branches as of March 2026 and savings account balances of Rs. 18.8 trillion. The bank also has a strong presence in rural areas through Regional Rural Banks, operating 4,181 branches across 196 districts. Its wide branch network helps SBI serve customers across urban, semi-urban, and rural regions, supporting strong deposit growth and improving banking access throughout the country.

Loan Portfolio

During FY26, the company reported strong growth in its gross advances, which increased by 20.01 percent year-on-year to Rs. 7,42,941 crore in March 2026. The steady rise in advances throughout the year reflects healthy credit demand and consistent business expansion across key lending segments.

The loan portfolio remained well diversified during FY26. Local lending contributed the largest share at 33.7 percent, followed by India-linked loans at 35.3 percent, while trade finance accounted for 31.0 percent of the portfolio. This balanced mix highlights the company’s focus on maintaining stable growth and reducing concentration risk across different business areas.

Company Overview

State Bank of India (SBI) was founded in 1955 and is headquartered in Mumbai, Maharashtra, India and is India’s largest public sector bank and one of the oldest financial institutions in the country. It plays a pivotal role in India’s banking system, offering services across retail, corporate, and international banking, with a significant global presence.

Recent Quarter Results

Coming into financial highlights, State Bank of India’s Net Interest Income has increased from Rs. 42,618 crore in Q4 FY25 to Rs. 44,380 crore in Q4 FY26, which has grown by 4.13 percent. The net profit has also grown by 5.58 percent from Rs. 18,643 crore in Q4 FY25 to Rs. 19,684 crore in Q4 FY26.

In terms of return ratios, the company’s ROCE and ROE stand at 6.09 percent and 15 percent, respectively. State Bank of India has an earnings per share (EPS) of Rs. 90.2, and its debt-to-equity ratio is 11.4x.

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