SBI share price falls after posting 10% YoY decline in net profit. Should you buy or sell?

State Bank of India (SBI) share price opened in the red on Monday, down over 1.78 per cent to ₹786, after posting financial results for the March quarter that were below market estimates.

SBI stock has been trading in downward momentum from the past five trading sessions, falling over 4.62 per cent during this period.

SBI Q4 Results

The PSU bank reported a 10 per cent year-on-year YoY drop in net profit for the fourth quarter of FY25, declining to ₹18,642.59 crore from ₹20,698.35 crore in the same period last year.

In contrast, net interest income (NII) saw a 2.7% annual increase, reaching ₹42,774.55 crore. However, the net interest margin (NIM) on its domestic portfolio fell by 32 basis points year-on-year (YoY), slipping to 3.15% from 3.47% in Q4FY24.

Operationally, the bank posted an operating profit of ₹31,286 crore in Q4FY25, up 8.83% from ₹28,748 crore a year earlier. Loan loss provisions rose sharply by 20.35% YoY to ₹3,964 crore, compared to ₹3,294 crore in the previous year’s fourth quarter.

On the asset quality front, the gross NPA ratio improved by 42 basis points YoY to 1.82%, while the net NPA ratio declined by 10 basis points to 0.47%.

The public sector bank also declared a dividend of ₹15.90 per share alongside its fourth-quarter earnings report.

“SBI's strong performance, improving asset quality, and growing advances make it an attractive option. The bank's diversified business model, strong parentage, and government support provide a stable foundation for long-term investors. SBI's ability to maintain healthy profitability and asset quality will be crucial for its future performance,” said Seema Srivastava, Senior Research Analyst at SMC Global Securities.

SBI share price - Should you buy or sell?

Brokerage firm Motilal Oswal has cut the earnings estimates, while reiterating a ‘buy’ rating with a target price of ₹915 apiece for SBI shares. 

“We cut our earnings estimates by 4.6%/5.0% for FY26/FY27 due to higher provisions and NIM pressures. We expect FY27 RoA/RoE at 1.0%/16.1%. Reiterate BUY with a TP of INR915 (based on 1.2x FY27E ABV),” the brokerage firm said.

Meanwhile, brokerage firm Equirus Securities remains confident on the bank's ability to maintain industry-leading asset quality. The brokerage firm has retained ‘add’ rating on the SBI stock with a target price of ₹885 apiece.

“We remain confident on the bank’s ability to maintain industry-leading asset quality, we do not foresee any near-term re-rating triggers. We thus anticipate limited upside from current levels and retain ADD on the stock with a SOTP-based Mar’26 TP of ₹885, valuing the core bank at ₹675 on 1.2x FY27E ABV,” the firm said in a note.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.